Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),

Mr. SPEAKER laid upon the Table Re-port from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:

Dagenham Urban District Council Bill [Lords].
Trowbridge, Melksham, and District Water Board Bill [Lords].
Brighton Corporation Bill [Lords].

Bills to be read a Second time.

Private Bill Petitions [Lords] (Standing Orders not complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the Petition for the following Bill, originating in the Lords, the Standing Orders have not been complied with, namely:

Grand Union Canal (Leicester Canals Purchase, etc.).

Report referred to the Select Committee on Standing Orders.

Seaton Urban District Council Bill,

As amended, considered.

Ordered, That Standing Orders 241 and 262 be suspended, and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]

Bill accordingly read the Third time, and passed.

Ministry of Health Provisional Orders (Great Marlow Water and Yeadon Water) Bill (by Order),

Second Reading deferred till Tomorrow.

Public Works Facilities Scheme (Great Western Railway) Bill,

Considered; to be read the Third time To-morrow.

Oral Answers to Questions — IMPERIAL ECONOMIC CONFERENCE.

Mr. WARDLAW-MILNE: 1.
asked the Secretary of State for Dominion Affairs whether the British representatives to the Ottawa Conference have yet been appointed; if so, what their names are; what preparation is being undertaken in this country for the work of the conference; and whether it is the intention of the Government to propose any definite measure of Imperial economic preference?

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I am not yet in a position to add anything to the answers which I gave on the 14th April and the 5th May to questions by the Hon. Members for Chislehurst (Mr. Smithers), Willesden East (Mr. D. G. Somerville), and Woolwich West (Sir K. Wood).

Mr. WARDLAW-MILNE: Can the right hon. Gentleman give any indication as to when he will be able to make a statement?

Mr. THOMAS: The House must be aware that this Conference is arranged by one of our Dominions. They must of necessity have regard to all the circumstances. Obviously, there are difficulties which Canada must face, but it is not for us to unduly press them.

Mr. WARDLAW-MILNE: Does that apply to that part of the question which refers to the preparations in this country?

Mr. THOMAS: On that matter, the hon. Member cannot be aware of the previous answer which I gave. I have already indicated that extensive preparations are being made upon all questions of trade so far as this country is concerned.

Sir KINGSLEY WOOD: Are they leading up to a definite policy on behalf of the Government.

Mr. THOMAS: I hope so, because the Dominions take the view, and have expressed it, that their policy is that their country comes first, and that will not be lost sight of as far as we are concerned.

Mr. SMITHERS: 2.
asked the Secretary of State for Dominion Affairs whether, in view of the effect that the delay in giving an assurance that all the Dominions are to represented at the forthcoming Imperial Economic Conference is having on the prospects of this Conference, he will take steps to ensure that information on this matter is forthcoming with the least possible delay?

Mr. THOMAS: As I have stated in answers to previous questions, the arrangements for the Conference are in the hands of His Majesty's Government in Canada and not in those of His Majesty's Government in the United Kingdom; I am not, however, aware of any ground for the assumption in the hon. Member's question.

Mr. SMITHERS: Is the right hon. Gentleman going himself, and has he still the same enthusiasm for Empire as when he took coal over? [Interruption.] May I press for an answer?

Oral Answers to Questions — TRADE AND COMMERCE.

EMPIRE TRADE.

Mr. MANDER: 3.
asked the Secretary of State for Dominion Affairs the amount spent by the Empire Marketing Board during each of the past thre years, and the estimated amount for this year in advertising in this country the goods of Australia and India, respectively?

Mr. THOMAS: No specific allocation has been made in the past or for the current year in the Empire Marketing Board's publicity expenditure for the advertising of the products of any individual Empire country. The Board's policy is to create a general demand for Empire produce, urging the purchase first of the produce of the home country and then of the produce of the Empire overseas. It is accordingly not possible to apportion the Board's publicity expenditure on any territorial basis.

Mr. MANDER: Will the right hon. Gentleman approach those two countries with a view to obtaining a little more reciprocity in the purchase of British goods?

Mr. THOMAS: That is a new form of request. Hitherto I understood that the policy was that self-governing Dominions, like Australia, were entitled to have regard to their own position. As far as India is concerned, her position has been explained. I also said that nothing that India does will prevent us from doing the best that we can for India.

Mr. MANDER: Would not the right hon. Gentleman's well-known persuasive powers be helpful in this matter?

Sir NICHOLAS G RATTAN-DOYLE: 4.
asked the Secretary of State for Dominion Affairs whether he will make proposals for setting up a commission of inquiry for Empire economic union on the same lines as the commission of inquiry for European union?

Mr. THOMAS: No, Sir.

Sir N. GRATTAN-DOYLE: Does not the right hon. Gentleman think that Empire economic unity will be a very good thing for this country?

Mr. THOMAS: I think that anything that tends to develop the Empire will be a good thing, but there are so many sins committed in the guise of general talks about the Empire that I should not like to commit myself to any general phrase.

Sir N. GRATTAN-DOYLE: Does not the right hon. Gentleman think that it will be a useful occupation—

Mr. SPEAKER: That appears to be a matter of opinion.

DUMPING, BOUNTIES, AND SUBSIDIES.

Sir K. WOOD: 6.
asked the President of the Board of Trade if he can now give any information concerning the conclusions of the Economic Committee of the League of Nations on the question of dumping bounties and subsidies?

The PRESIDENT of the BOARD of TRADE (Mr. William Graham): I can add nothing at present to the answer I gave to the right hon. Gentleman on the 24th March. No further information is likely to be available until after the next
meeting of the Economic Committee, which I understand will be held in June.

Mr. BROCKWAY: Can the right hon. Gentleman say whether the British Government have taken any steps to bring the proposals for import boards before this committee?

Mr. SPEAKER: That matter does not arise out of the question.

TARIFF TRUCE.

Mr. FREEMAN: 8.
asked the President of the Board of Trade how many countries have now ratified the tariff truce proposals; the names of those countries who have done so during the last month; the names of those countries who have refused; and those who are still considering the matter?

Mr. W. GRAHAM: As the answer is somewhat long, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.

Mr. FREEMAN: Does my night hon. Friend contemplate taking any further action in this direction and so avoid the difficulties which may arise over subjects like the German and Austrian customs union?

Mr. GRAHAM: Oh, yes, in reply to questions I have indicated the course which we propose to take.

Sir PHILIP CUNLIFFE-LISTER: Can the right hon. Gentleman say into which category this country falls? [Interruption.]

Sir K. WOOD: Surely the right hon. Gentleman can state whether—

Mr. SPEAKER: Colonel Burton.

Following is the answer:

Thirteen countries have now deposited ratifications of the Commercial Convention, namely, Belgium, Denmark, Finland, France, Greece, Italy, Latvia, Luxemburg, the Netherlands, Norway, Sweden, Switzerland, and the United Kingdom. So far as I am aware, the only ratification deposited during the past month has been that of France. The German Government have announced that, in view of the failure of the recent Conference to reach agreement with regard to the putting into force of the
Convention, they have decided not to deposit their ratification.

With regard to the last part of the question, four countries which signed the Convention have not so far ratified it, namely, Austria, Estonia, Poland and Roumania. I am not aware, however, that any of these countries are considering the possibility of ratifying.

RUSSIA AND ITALY (AGREEMENT).

Sir ASSHETON POWNALL: 10.
asked the President of the Board of Trade If he has now been able to obtain details as to the Russo-Italian trade agreement?

Mr. W. GRAHAM: A translation of the agreement was published in the issue of the Board of Trade Journal for 7th May.

Sir A. POWNALL: Can the right hon. Gentleman say, now that these particulars are available, whether it will not be possible for this country to enter into more favourable arrangements than we have at present for equality of exchange with Russia rather than our sending to them one-third of what we get from them?

Mr. GRAHAM: That opens up a very large question. This relates to export credits, and, in any event, any question upon that point would require to be directed to the Department of Overseas Trade.

Mr. STRAUSS: Can my right hon. Friend say whether the agreement limits in any way the Russian imports into Italy, or involves any question of embargo?

Mr. GRAHAM: I should not like to reply to that question without notice. It is a long and, in some respects, a complicated agreement.

Mr. BROCKWAY: Can the right hon. Gentleman say whether the agreement allows more extended credits for Russia for shipbuilding and machinery than apply in this country?

Mr. GRAHAM: There is a wide variety of provisions with regard to export credits, and it may be that here and there the period is longer, but in all these questions I should prefer to have notice. This is not a matter which can properly be dealt with in a supplementary reply.

FOREIGN PRODUCE (RAILWAY RATES).

Captain PETER MACDONALD: 11.
asked the President of the Board of Trade what foreign countries encourage their agricultural exports by means of differential railway freight rates; and what is the nature of the traffic thus assisted?

Mr. W. GRAHAM: I am afraid I have not the information asked for by the hon. and gallant Member.

BRITISH FILM INDUSTRY (AMERICAN INTERESTS).

Mr. REMER: 12.
asked the President of the Board of Trade if he has considered the report sent to him from the London Trades Council as to the control of the British film industry by American interests; and what action he intends to take?

Mr. W. GRAHAM: Yes, Sir, but the report does not appear to be such as to call for any specific action by me.

Mr. REMER: Is the right hon. Gentleman prepared to publish the report so that the information can be made available to the public?

Mr. GRAHAM: I am afraid that that would be difficult. I think that this reached me in private and confidential form, and that the question is one for the London Trades Council.

Mr. REMER: If the London Trades Council were agreeable, would the right hon. Gentleman be prepared to publish it?

Mr. GRAHAM: I have already indicated that this is a matter for the Trades Council. If they wish to publish it, I have no power to stop them.

Mr. REMER: 25.
asked the President of the Board of Trade if he has discovered a remedy for the process by which the Gaumont British Picture Corporation, Limited, has come under American control by means of interlocking holdings through the Metropolis and Bradford Trust, the United American Investing Corporation, and six other persons, of whom some represent American interests, notwithstanding special provisions in the articles of association of the Gaumont British Picture Corporation, Limited, designed to prevent the Gaumont Company
coming by indirect means under non-British control; and will he consult with the Wilfred Greene Committee about the failure of the disclosure of ownership requirements of the 1929 Act and ask that committee to advise him as to what amendments to the Companies Act, 1929, are necessary in order to prevent a company operating under the 1929 Act and controlled indirectly by foreigners calling itself British in its title?

Mr. GRAHAM: The available facts relating to the control of the Gaumont British Picture Corporation, Limited, were given in my reply to the hon. Member of 21st April, and I can only refer him to that reply in connection with the suggestions contained in the latter part of his present question.

Mr. REMER: May I ask if the right hon. Gentleman has considered any remedy for this disastrous state of affairs?

Mr. GRAHAM: I think my previous reply indicates that a remedy, if sought, would probably be an amendment of the Companies Act. I am collecting information from many quarters on that subject, but I am not able at this stage to promise fresh legislation.

Mr. REMER: Will the right hon. Member answer the last part of my question in which I ask him whether he will consult the committee on this subject?

Mr. GRAHAM: I cannot undertake to do that off-hand without inquiry. The hon. Member may rest assured that every consideration bearing on an amendment of this Act and problems of this kind will be taken into account.

RUSSIA.

Brigadier - General CLIFTON BROWN: 14.
asked the President of the Board of Trade whether the tanks and armed vehicles for which he gave licences for exportation to Russia in 1930 were of our latest Army pattern; whether they were exported by private firms or by a War Office Department; and whether any other similar weapons of war were exported to other countries in 1930–31?

Mr. W. GRAHAM: The tanks and light armoured vehicles for Soviet Russia are
being built to designs of the private manufacturers to whom the export licences were issued and by whom the material is being exported. With regard to the last part of the question, these articles are not separately classified in the trade accounts but are included under the heading of military, naval and ordnance stores and appliances. I am therefore unable to say what tanks and armoured vehicles have actually been exported, but since the beginning of 1930, 31 licences have been issued for the export of such articles and parts to the following foreign countries, besides Soviet Russia: The Argentine Republic, Belgium, Bolivia, China, Czechoslovakia, France, Greece, Italy, Japan, Latvia, Peru, Poland, Portugal, Siam and the United States of America.

Brigadier-General BROWN: Does the right hon. Gentleman think that it is best in the public interest that our latest designs should go abroad?

Mr. SPEAKER: That is a matter of opinion.

Sir JOSEPH LAMB: 24.
asked the President of the Board of Trade whether he has taken or will take steps to ascertain the cost of production of butter in Soviet Russia and the price at which it is being retailed in that country; and if he will state the cost of packing and transportation to this country and the price at which Russian butter is being retailed in Great Britain?

Mr. GRAHAM: As regards the first part of the question I would refer the hon. Member to the answer given by the Secretary to the Overseas Trade Department on 26th January last to a question put by the right hon. Gentleman the Member for Ealing (Sir H. Nield). I have no information as to the cost of packing this article and transporting it to this country. As regards retail price in this country, I understand that the great bulk of Russian butter is blended with other butter and is not sold separately as such.

Sir J. LAMB: Can the right hon. Gentleman say whether the answer to the first question did give the price at which the butter was sold?

Mr. GRAHAM: I am not quite clear on that point. I am afraid that I must refer my hon. Friend to the very elaborate table which was given on the 26th January.

Mr. SMITHERS: Is it not a fact that this butter is sent here at well under the cost of production price?

Colonel HOWARD-BURY: Can the right hon. Gentleman say under what conditions this butter is produced?

Sir K. WOOD: 59.
asked the Secretary to the Overseas Trade Department whether he has now received any reply from the commercial counsellor at Moscow as to the report on the organisation of the administrative machinery of foreign trade in the Soviet Union; and when the report may be expected?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith): In a despatch dated 27th April, the Commercial Counsellor to His Majesty's Embassy at Moscow reported that he had now received the promised material regarding the foreign trade machinery of the Union of Soviet Socialist Republics. As, however, further inquiry will be necessary on many points, he considers that it will probably take three weeks more to finish the report.

JAPANESE COTTON HOSIEEY (IMPOSTS).

Mr. RAMSBOTHAM: 15.
asked the President of the Board of Trade the value of cotton hosiery imported into Great Britain from Japan for the year ended 31st December, 1930, and for the three months ended 31st March, 1931; and whether he can say how many persons would have been employed in Great Britain in the manufacture of that amount of cotton hosiery?

Mr. W. GRAHAM: During the year 1930, the total declared value of hosiery of cotton, or of which the chief value is cotton, imported into the United Kingdom, registered as consigned from Japan, was as follows: Stockings and hose, £167,948; underwear, £337,423; and fancy hosiery, £52,615. During the first three months of 1931 the values were £39,477, £60,902 and £40,644, respectively. I regret that I have not the data necessary to enable me to answer the second part of the question.

Mr. REMER: How does the right hon. Gentleman reconcile his lack of knowledge with the speech that he made a few nights ago?

Mr. WISE: Is it not the case that they are of qualities and descriptions not normally produced in this country?

Mr. GRAHAM: I am afraid that I shall require notice of that question. I have concentrated my reply on the actual value of the imports.

TEA.

Major-General Sir ALFRED KNOX: 16.
asked the President of the Board of Trade what percentage of the retained imports of tea to the United Kingdom was of Empire origin in the years 1921, 1926, and 1930, respectively?

Mr. W. GRAHAM: Of the total imports of tea retained in the United Kingdom during the years 1921, 1926, and 1930, the proportions consigned from British countries were 92.1 per cent., 84.1 per cent., and 81.0 per cent., respectively.

Sir A. KNOX: Does the right hon. Gentleman not think, in view of the progressive decline of Empire tea imported into this country, that it would be wise to reimpose the preference which the Government withdrew?

Sir A. KNOX: 17.
asked the President of the Board of Trade what is the duty on tea imported into Holland of Dutch origin and of British Empire origin, respectively?

Mr. GRAHAM: The customs duty levied on tea on importation into the Netherlands is 75 florins per 100 kilogrammes, or about 6¾d. per lb. whatever the origin of the tea.

Mr. OSWALD LEWIS: 23.
asked the President of the Board of Trade what percentage of the total retained imports of tea in the United Kingdom during each of the last five years was of foreign origin?

Mr. GRAHAM: Of the total imports of tea retained in the United Kingdom during each of the years 1926 to 1930, the proportions consigned from foreign countries were 15.9, 16.8, 15.7, 18.1 and 19.0 per cent., respectively.

Mr. LEWIS: Will the right hon. Gentleman tell the House of any steps
that the Government are taking with the view of increasing the proportion of Empire tea imported?

Mr. GRAHAM: There is an open market here, and we take the great bulk of tea from the Empire. If the hon. Member suggests a duty or preference, that is something that we cannot impose.

ANGLO-FRENOH COMMERCIAL AGREEMENT.

Mr. ARTHUR MICHAEL SAMUEL: 19.
asked the President of the Board of Trade whether the most-favoured-nation principle, embodied in the existing Franco-British commercial agreement of 1882, operates to accord the same benefit to countries which impose duties upon French goods as it does upon British goods although there is a free market here for most French goods?

Mr. W. GRAHAM: Neither the Anglo-French Commercial Convention of 1882, nor any other treaty in force between the two countries includes any provision securing most-favoured-nation treatment in regard to Customs duties for United Kingdom goods in France. As I informed the hon. Member on 5th May, we enjoy this treatment in virtue of a French law of nearly 50 years standing.

Mr. SAMUEL: Why does the right hon. Gentleman say that it is enjoyed, in view of the fact that this most-favoured-nation treatment which is given to us is also given to other nations? There is therefore no advantage to us.

Mr. GRAHAM: Enjoyment is not restricted because it extends to other people.

Mr. SAMUEL: Does not the word "enjoy" imply—

Mr. SPEAKER: The hon. Member must look it up in the dictionary.

OVERSEAS TRADE (NEW ZEALAND AND RUSSIA).

Sir N. GRATTAN-D0YLE: 18.
asked the President of the Board of Trade how the trade of Great Britain, both imports and exports, with Soviet Russia compared with that with New Zealand in the year 1930 and in the first quarter of 1931?

Mr. W. GRAHAM: As the answer involves a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Sir N. G RATTAN-DOYLE: Will the right hon. Gentleman consider the advisability of working out a table showing a proportion per head of the population of the imports between Russia and Great Britain?

Mr. GRAHAM: That is a separate question. There are in existence tables

The following table shows the total declared value of merchandise imported into and exported from the United Kingdom and registered during the year 1930 and the first three months of 1931 as consigned from and to the Soviet Union (Russia) and New Zealand, respectively.



Total Imparts into the United Kingdom.
Exports from the United Kingdom.


Country of Consignment.
Produce and manufactures of the United Kingdom.
Imported Merchandise.


Soviet Union:
…
£
£
£


1930
…
34,245,419
6,789,844
2,556,478


1931 (January-March)
…
6,433,886
1,425,113
472,590


New Zealand


1930
…
44,939,282
17,867,997
763,956


1931 (January-March)
…
10,497,356
3,152,389
171,689


Note.=The above figures are provisional.

PORTUGAL (TREATY).

Sir A. POWNALL: 26.
asked the President of the Board of Trade whether the Portuguese Treaty comes up for revision, and, if so, at what date, or whether it continues in force unless and until denounced?

Mr. W. GRAHAM: This question was answered yesterday.

Sir A. POWNALL: This question was not put at Question Time yesterday. I asked that it might be deferred in order that I might put it to the right hon. Member?

Mr. GRAHAM: There must be some misunderstanding, because an hon. Member, on behalf of the hon. Member, put the question yesterday. At any rate, the reply is as follows:
The position is correctly described in the latter part of the question. Notice of denunciation can now be given by cither party at any time, and if given takes effect 12 months from the date of the notice."—[OFFICIAL REPORT, 18th May, 1931; col. 1576, Vol. 252.]

Sir A. POWNALL: Will the right hon. Gentleman consider giving notice in regard to ending this treaty in the event of Portuguese discrimination against British shipping continuing?

showing the percentage of the separate importations per head.

Sir N. G RATTAN-DOYLE: Will the right hon. Gentleman be kind enough to add that to his answer when he circulates it?

Following is the reply:

Mr. GRAHAM: I have already informed the House that I have received a deputation on this subject. Many points mnst be taken into account, including the point which the hon. Member has raised, but I am unable at this stage to intimate the decision.

Mr. DAY: May I ask whether it is in order for an hon. Member to put a question on behalf of another hon. Member one day and then for the hon. Member to say that it was not asked?

Mr. SPEAKER: The rule is that when questions are gone over the second time, a question of an hon. Member who is absent can only be asked by an hon. Member at the special request of the hon. Member in whose name the question is down on the Order Paper.

Oral Answers to Questions — DOMINIONS (WAR DEBT PAYMENTS).

Sir N. GRATTAN-DOYLE: 5.
asked the Secretary of State for Dominion Affairs whether any British Dominion other than Australia has asked for a suspension of its war debt payments?

Mr. THOMAS: No, Sir.

Sir N. GRATTAN-DOYLE: On a point of Order. I am afraid that I did not catch the answer. I want to ask something arising out of the reply.

Mr. SPEAKER: The right hon. Gentleman gave a very decisive answer.

Sir N. GRATTAN-DOYLE: I am sorry, but there was so much hilarity at the remark of the right hon. Gentleman in replying to my question that I did not hear the reply.

Mr. SPEAKER: I do not think that it would take the right hon. Gentleman long to repeat it.

Oral Answers to Questions — FLOUR PRICES.

Sir K. WOOD: 7.
asked the President of the Board of Trade whether the Food Council have now received the necessary information concerning the new scale of the price of flour; and whether he has yet received their report?

Mr. W. GRAHAM: No, Sir; I understand that the Food Council are meeting shortly and will consider the position. As I indicated on 28th April, the Council have met with great difficulty in obtaining the requisite information.

Oral Answers to Questions — COASTGUARD SERVICE.

Commander SOUTH BY: 13.
asked the President of the Board of Trade when the committee now inquiring into the question of the efficiency and adequacy of the coastguard service will be in a position to issue a report?

Mr. W. GRAHAM: I am informed that the committee have made considerable progress and are approaching the completion of their investigations. It is hoped that their report may be made within the next two months.

Mr. WILLIAM BENNETT: Can the right hon. Gentleman say whether the work of the committee includes an inquiry into the working conditions of a lighthouse keeper?

Mr. GRAHAM: I shall require notice of that question. At the time of the appointment I indicated that the committee was to inquire into the whole organisation of the coastguard service and matters relevant thereto.

Oral Answers to Questions — SUEZ CANAL.

Mr. WEST RUSSELL: 20.
asked the President of the Board of Trade when he will be able to make a statement about the transit dues charged by the Suez Canal Company so far as they effect British shipping and the export of British goods to the East?

Mr. W. GRAHAM: A meeting of the directors of the Suez Canal Company was held in Paris on 11th May and I understand that a decision was then reached adverse to any immediate reduction of the dues. The report of the British Government directors has been received and will be considered by the Departments concerned. I will make a statement on the subject as soon as possible.

Mr. SAMUEL: Has the right hon. Gentleman communicated with the Liverpool Shipowners' Association, who are interested in this matter and are taking it up very exhaustively?

Mr. GRAHAM: I have not communicated with them, because I have before me their latest letter setting forth their reply to previous communications.

Mr. A. M. SAMUEL: 52.
asked the Financial Secretary to the Treasury whether the Suez Canal Company's accounts provide a sinking fund to amortise share capital at the end of the concession; and how the British Government's holding has been varied by the drawing of shares in the canal company?

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): The answer to the first part of the question is in the affirmative. As regards the second part, out of 353,504 shares held by the British Government, 51,972 have been drawn for repayment. 300 further shares are held in the names of the British Government Directors of which 48 have been drawn for repayment.

Mr. SAMUEL: Will the hon. Gentleman notify the Suez Canal Company, through the British Government's representatives on the Board, that canal dues might come down, because there is no need to keep the dividends unduly high, as a sinking fund is already being provided, I understand, from the hon.
Gentleman's reply, for the extinction of the capital when the concession comes to an end.

Oral Answers to Questions — CINEMATOGRAPH FILMS ACT.

Mr. DAY: 22.
asked the President of the Board of Trade the number of cinematograph exhibitors or renters who have failed during the previous 12 months to comply with the quota provisions of the Cinematograph Films Act, 1927?

Mr. W. GRAHAM: 129 exhibitors who carried on business throughout the quota year ended September last failed to comply with the quota requirements of the Act. In addition, there were, of course, a number of exhibitors who exhibited for only a part—often a small part—of the year. The renters' quota year ended on 31st March, 1931, and the information desired with regard to the renters is not yet available.

Mr. DAY: Will the right hon. Gentleman bear in mind, in taking these cases into consideration, the difficulty experienced by an independent exhibitor in obtaining sufficient films to comply with the quota regulations?

Mr. GRAHAM: Yes, all these matters have been borne in mind. My hon. Friend knows that exemption certificates are given in many cases.

Mr. DAY: Can the right hon. Gentleman say how many exemption certificates have been granted?

Mr. GRAHAM: Not without notice.

Oral Answers to Questions — SCOTLAND.

PRISONS (VISITING COMMITTEES).

Mr. R. W. SMITH: 27.
asked the Secretary of State for Scotland what is the number of women members of visiting committees for prisons in Scotland; and if there are any visiting committees on which there are no women members?

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Westwood): There are 35 women members of visiting committees for seven prisons. There are no women members on the visiting committees for Kirkwall and Lerwick Prisons,
where female prisoners are seldom received, nor on the visiting committees for Barlinnie and Peterhead where no female prisoners are received. The visiting committees for the three Borstal institutions in which females only are detained number 15 members, who are all women.

Mr. SMITH: Will the Under-Secretary take steps to see that in the case of prisons where females are received, and where there are no women members of the committee, women are appointed to the committee?

Mr. WESTWOOD: In all prisons where females are received there are, as I have pointed out, women visitors.

Mr. SMITH: I understood the hon. Member to say that there were three prisons in which women were received where there were no women visitors.

Mr. WESTWOOD: I did not make that statement, and the hon. Member will see by my answer in the OFFICIAL REPORT to-morrow that I did not make that statement.

INDUSTRIAL LAND (OWNERS AND OCCUPIERS).

Major ELLIOT: 28.
asked the Secretary of State for Scotland what is the number of owners of industrial lands in Scotland, the number of occupiers of industrial land, and the number of cases in which the owner is also the occupier; the total value of industrial subjects in Scotland; and the total value of those owned by the occupiers?

The SECRETARY of STATE for SCOTLAND (Mr. William Adamson): The total gross value of industrial and freight transport subjects in Scotland for the year 1930–31 is £7,134,000 and the rateable value £1,671,000. The return received by the Department of Health for Scotland does not show industrial subjects and freight transport subjects separately. I regret that the remainder of the information asked is not available and could be obtained only by calling for a special return which would impose a considerable amount of labour and expense on local authorities and would take a considerable time to obtain.

Major ELLIOT: Can the right hon. Gentleman say whether this information
will be ready in time to be considered in relation to the proposed tax upon land value?

IRISH IMMIGEATION.

Mr. BOOTH BY: 29.
asked the Secretary of State for Scotland whether the inquiries he has been making into the question of Irish immigration are concluded; and whether he proposes to take any action in the matter?

Mr. W. ADAMSON: This question remains under consideration, and I am not in a position to make any statement. Further information on the subject will be furnished by the report of the recent -census, when published.

Mr. BOOTH BY: Is it not the fact that this question has been under the consideration of the right hon. Gentleman for nearly two years, and is there any chance of improving the conditions in the West of Scotland until the volume of Irish immigration is controlled?

Mr. BARR: Is it not the case that this matter was under the control of the late Government for five years?

Mr. ADAMSON: I am very glad that the hon. Member for East Aberdeen (Mr. Boothby) has put his supplementary question, because it gives me an opportunity of replying to the effect that the present Government have not had this question under consideration for half the time that the late Government were considering it.

Mr. BOOTHBY: Does the right hon. Gentleman think that to blame the inactivity of the preceding Government is any excuse for the present Government?

Colonel HOWARD-BURY: Has the question of Scottish immigration to this country been considered?

HOUSING.

Mr. BOOTHBY: 30.
asked the Secretary of State for Scotland the number of State-aided houses completed in Scotland during the years 192V, 1928, 1929, 1930 and 1931, respectively?

Mr. WESTWOOD: As the answer involves a number of figures, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.

Mr. BOOTHBY: Can the Under-Secretary say whether more houses were built under the administration of the present Government than under the administration of the previous Government?

Following is the answer:

The numbers of State-aided houses completed in Scotland during each of the years in question were as follows:

1927–20,158 houses (including 1,110 Government steel houses).
1928–18,096 houses (including 324 Government steel houses).
1929–18,240 houses.
1930–11,056 houses.
1931 (to 31st March)–1,911 houses.

Tenders have been approved up to 16th May for 3,843 houses, and pressure is being exercised by conference and otherwise on all local authorities to secure an expansion of the housing programme.

Mr. SINKINS0N: 31.
asked the Secretary of State for Scotland to what extent the county councils and burgh authorities of Berwickshire and East Lothian, respectively, have exercised their powers under the Housing (Rural Workers) Act, 1926?

Mr. WESTW00D: Under the Housing (Rural Workers) Act, 1926, as at 31st March last, the County Council of Berwickshire had granted certificates for the improvement of 535 houses. Work had been completed on 361 and was in progress on 12 of these houses. For the County Council of East Lothian the corresponding figures are 1,039, 757 and 250. No town council in either county has adopted a scheme under the Act.

Mr. SINKINS0N: 32.
asked the Secretary of State for Scotland whether the county council and burgh authorities of Berwickshire and East Lothian, respectively, have submitted information in terms of Section 22 (2) of the Housing (Scotland) Act, 1930; and can he say what the information is?

Mr. WESTW00D: The county councils of Berwickshire and of East Lothian and the town councils of all the burghs in these counties have submitted general statements as required by Sub-section (2) of Section 22 of the Housing (Scotland) Act, 1930. These statements show that during the next three years the local
authorities concerned propose to provide 705 houses. I am sending to my hon. Friend a statement showing the proposals of each local authority.

FROIT-GROWING INDUSTRY.

Sir FREDERICK THOMSON: 35.
asked the Secretary of State for Scotland whether he is aware of the losses incurred by the Scottish fruit-growing industry last season through the importation of foreign fruit pulp, and that much fruit was left unpicked; and whether he has any information as to the effect of this on the amount and the duration of the employment of those engaged in the fruit harvesting in Scotland last year as compared with recent years?

Mr. W. ADAMSON: I would refer the hon. Member to my replies to questions by the hon. and gallant Member for North Midlothian (Major Colville) on 24th February and 10th March. I am well aware of the position and would repeat what I said then that the first necessity in the industry is that the growers should organise themselves and that the Marketing Bill at present before Parliament will enable them to do so. With regard to the second part of the question, I have no precise information as to the amount of employment afforded in connection with fruit harvesting in Scotland last year as compared with previous years, but my information is to the effect that in the largest fruit-growing area there was no decrease in the amount of employment provided. I may add that there appears to have been a very large crop of raspberries last year, due partly to the introduction of a more prolific cane known as the Lloyd George variety.

Sir F. THOMSON: Is the right hon. Gentleman not aware that large quantities of Russian fruit pulp were sold in this country at a price hardly above the cost in this country of picking the fruit alone; and, arising out of the second part of the question, is the right hon. Gentleman not aware that thousands of women who were employed in Scotland in fruit-picking last year, were dismissed after only three weeks' work, and that very large quantities of fruit were left unpicked?

Several HON. MEMBERS: rose
—

Mr. SPEAKER: We cannot have a series of speeches in supplementary questions.

ROAD BRIDGE (ROSYTH).

Mr. DUNCAN MILLAR: 57.
asked the Minister of Transport when it is expected that the preliminary survey work in connection with the proposed road-bridge over the Forth at Rosyth will be completed and that the scheme will be put into final shape for approval; the estimated number of men who would be employed on the construction of the bridge; and the approximate period of contruction?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Parkinson): I anticipate that three months will be occupied in preliminary surveys and borings, and in the preparation of the engineer's report. Until that report is in the hands of my right hon. Friend I shall not be in a position to give the further particulars for which the hon. and learned Member asks.

Oral Answers to Questions — FISHING INDUSTRY.

MORAY FIRTH (FOREIGN TRAWLERS).

Mr. MILLAR: 33.
asked the Secretary of State for Scotland whether he has any proposals in view for the exclusion of foreign trawlers from the Moray Firth and other closed waters round the Scottish coast; and whether he can now make any statement on the subject?

Mr. W. ADAMSON: This question is being closely examined in consultation with other Ministers concerned, but I am not in a position to make any statement.

Mr. MILLAR: As these consultations have been going on for some time, can the right hon. Gentleman say when he will be able to make a statement; and will he take into consideration the desirability of convening a meeting of the various North Sea Powers in order that the matter may be considered?

Major MCKENZIE WOOD: 34.
asked the Secretary of State for Scotland whether on the occasion of the damage to cod nets by foreign trawlers in the Moray Firth last February, the commander of the British cruiser "Spey"
verified the damage or drew up a formal statement of such verification, as required to do by Article XXX of the North Sea Fisheries Convention, 1882; and, if so, whether he will consider publishing the statement?

Mr. W. ADAMSON: Complaints of damage to cod nets in certain cases in the Moray Firth reported to His Majesty's ship "Spey" were investigated and reported upon by the commander. As the whole question of pursuing claims for compensation for the damage is under consideration, I do not consider it expedient that the reports should be published.

Major WOOD: Will the right hon. Gentleman say whether the commander of the "Spey" made a report, as required by that Article, and gave the report to the skipper of the trawler?

Mr. ADAMSON: In my answer I have said that the matter was investigated and reported upon by the commander.

Major WOOD: Will the right hon. Gentleman not say whether the requirements of this particular Article were carried out, and whether, in point of fact, the commander of the "Spey" gave a statement to the skipper of the trawler as to what evidence of damage he found in the trawl?

Mr. ADAMSON: I have already told the hon. and gallant Member that, seeing that the evidence is being considered with a view to compensation being claimed, I do not consider it expedient to make a statement at the present moment.

Major WOOD: Cannot the right hon. Gentleman say whether such a report was made?

INQUIRY (COMMITTEE'S REPORT).

Mr. BOOTHBY: 46.
asked the Prime Minister whether the report of the committee which is inquiring into the fishing industry has yet been received by the Government; and whether he proposes to publish it?

The PRIME MINISTER (Mr. Ramsay MacDonald): The answer to the first part of the question is in the negative; the second part does not therefore arise.

Mr. BOOTHBY: Is the right hon. Gentleman aware of the urgency of this question; and, in view of the imminence of the summer fishing, will he try to do-something to expedite the publication of this report

The PRIME MINISTER: Yes, but the difficulty is to get the committee to do it as well. I am perfectly well aware of the urgency of the matter.

Sir F. THOMSON: Will the Prime Minister keep in view the statement of his colleague the Minister of Agriculture in this House at the beginning of February, that the committee were then considering the draft report.

The PRIME MINISTER: I know, but I hope that hon. Members will not attribute the blame for any delay to us. We have been doing our best to get the report.

NORTH SEA FISHERIES CONVENTION, 1882.

Major WOOD: 69.
asked the Secretary of State for Foreign Affairs whether the King of Norway has ever been invited to adhere to the North Sea Fisheries Convention, 1882, as appears to be contemplated by the additional article to the convention?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Dalton): His Majesty's Government suggested to the Norwegian Government, shortly after the separation of Norway from Sweden, that Norway should accede to the convention. The Norwegian Government, however, felt unable to do so.

Major WOOD: Will the hon. Gentleman represent to the Foreign Secretary the desirability of extending a further. invitation to Norway?

Mr. DALTON: I will convey the hon. Gentleman's request, but I must warn him that the Norwegian Government impose a four-mile limit, which is contrary to our limit.

Oral Answers to Questions — COAL INDUSTRY.

BOYS (EMPLOYMENT UNDERGROUND).

Sir ROBERT NEWMAN: 36.
asked the Secretary for Mines the number of boys under 16 years of age who are being employed below ground in mines; and the total number of boys under 16 years of
age who were killed and the number who were injured while working in the mines below ground during the years 1927, 1928, 1929, and 1930?

The SECRETARY for MINES (Mr. Shinwell): As the answer involves a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Mr. FREEMAN: Will the hon. Gentleman consider the desirability of prohibiting boys under 16 working underground in mines, as is already done in other countries?

Following is the answer:

The information, so far as it is available, is as follows:—


Number of boys under 16 years of age employed below ground at Mines under the Coal Mines Act, 1911, and the number of such boys killed and injured by accidents at the mines, during the years 1927 to 1930.


Year.
Average number employed below ground.
Number of boys killed.
Number of boys disabled for more than 3 days.


1927
…
29,563
35
6,518


1928
…
26,663
30
6,114


1929
…
28,574
40
7,122


1930
…
25,162
24
Not yet available.

MINERS' WELFARE FUND.

Major BEAUMONT THOMAS: 37.
asked the Secretary for Mines whether he will review the position of the Miners' Welfare Fund, with the object of reducing the contribution of 1d. per ton, which is a burden on the industry?

Mr. SHINWELL: I would refer the hon. and gallant Member to the announcement I made in this House last week, during the Debate on the Third Reading of the Mining Industry (Welfare Fund) Bill, that I am setting up a special committee, under the chairmanship of Lord Chelmsford, to review the work of the fund fully, with special reference to the amount and duration of the welfare levy, and to make recommendations.

Mr. MARLEY: Will my hon. Friend consider reducing the royalties, which are a very much heavier burden on the industry?

NOTTINGHAMSHIRE COALFIELD.

Mr. PERRY: 38.
asked the Secretary for Mines the amount of profit per ton in the Nottinghamshire coalfield for the March quarter, 1931, of which amount it is estimated that 4.64d. per ton was due to reduced production costs attributable to the Coal Mines Act, 1930; and if he will give similar figures for each ascertainment district?

Mr. SHINWELL: I understand that the figure of 4.64d. per ton represents the difference between the costs of production in the March quarters of 1930 and 1931 on the basis of the tonnage raised and weighed at the pit-head. I have no information which enables me to state whether this reduction is due to the operation of the Coal Mines Act, 1930, or to other causes. Three other districts showed also a reduction in production costs in March quarter, 1931, compared with the March quarter, 1930.

PRICES.

Mr. LAWTHER: 39.
asked the Secretary for Mines if he will take steps to secure that in the case of all coal sold for household and industrial purposes the pit head selling price is also stated on the invoices in order that purchasers may know the difference between pit-head selling prices and retail or contract prices?

Mr. SHINWELL: I have carefully considered my hon. Friend's suggestion, but I do not think it is possible to put it into practice.

Mr. LAWTHER: Having regard to the fact that there is a desire that householders shall not be robbed, and as they have the knowledge that they are robbed, ought it not to be shown exactly by how much they are robbed?

Mr. FREEMAN: 41.
asked the Secretary for Mines how the coal delivered in London and charged to the House of Commons at 32s. per ton compares with coal charged to private consumers at prices varying from 45s. to 50s. per ton at the present time?

Mr. SHINWELL: I am advised by my right hon. Friend the First Commissioner of Works that the figure of 32s. per ton is the average cost of coal delivered to all Civil Government buildings in London,
and includes ordinary overhead charges, but no allowance for headquarters officials. The corresponding figure for the class of coal delivered to the House of Commons is 38s. 6d. per ton. Coal believed to be of a similar quality to the latter is retailed in Central London at prices ranging from 45s. to 50s. per ton, but I do not know the cost of the various items which make up these prices. The facilities for spreading over the deliveries throughout the year, keenness of buying and wide competition, are factors which are undoubtedly reflected in the low delivery cost to Government buildings.

Mr. FREEMAN: Does not that indicate a very wide discrepancy between the price charged to the Government and that charged by private enterprise to private consumers?

WORKING HOURS.

Major THOMAS: 40.
asked the Secretary for Mines whether the Government have yet come to any decision with regard to the operation of the seven-hour day after 8th July?

Mr. SMITHERS: 44.
asked the Secretary for Mines what is the policy of the Government on the question of the return to the seven hours working day in the mines in July?

Mr. SHINWELL: Discussions between the Government and the Mining Association and the Miners' Federation are still proceeding, and there is nothing yet to add to the answer given by the Prime Minister to the hon. Member for the Chislehurst Division (Mr. Smithers) on the 12th May.

Mr. SMITHERS: Is it not a fact that a return to the seven-hour day will put the coal export trade out of business?

SELLING EXPENSES.

Mr. POTTS: 42.
asked the Secretary for Mines whether any deduction is made in the proceeds for coal in the coal trade industry to meet the cost of coal agencies; and, if so, can he state the amount deducted for the year 1931?

Mr. SHINWELL: I understand the practice to be that selling expenses, including sales agency commissions, are not included in the costs of production in the ascertainment statement, but are
deducted from the gross proceeds of sale in arriving at the figure of proceeds to be used in the ascertainment. I am not aware of the amounts so deducted, as the figures are confidential to the accountants and are not shown in their reports. As my hon. Friend is aware, the procedure followed in connection with wages ascertainments is the subject of agreements between the parties concerned.

Mr. POTTS: Will the hon. Gentleman endeavour to ascertain the actual figure and let me have it?

Mr. SHINWELL: I am afraid that I cannot help my hon. Friend, because these returns are confidential.

PIT PONIES.

Sir R. NEWMAN: 43.
asked the Secretary for Mines whether he will consider the desirability of making legal provision regulating the number of hours and shifts a horse or pony may be worked underground per day and per week?

Mr. SHINWELL: The proposal made in this question and others relating to the employment of pit ponies are under consideration.

Oral Answers to Questions — RAILWAYS (ELECTRIFICATION).

Mr. SMITHERS: 45.
asked the Prime Minister what is the policy of the Government on the matter of granting State assistance in respect of the electrification of the railways?

The PRIME MINISTER: The problems, both technical and economic, raised by the recent report of Lord Weir's Committee require the consideration of the railway companies in the first instance. Meanwhile it would be premature for the Government to attempt to define its policy in the matter.

Mr. SMITHERS: Will the Prime Minister set up a committee to inquire into this subject and advise the Government, as the Government have no policy of their own?

Mr. BROCKWAY: In considering giving any further status to railways, will the right hon. Gentleman consider laying down, as a condition, the payment of a living wage to railway workers?

Oral Answers to Questions — FINANCE BILL.

OILS DUTY.

Mr. REMER: 47.
asked the Chancellor of the Exchequer the quantities imported into this country in 1930 of oils taxed upon importation which are used for industrial purposes, as distinct from motor spirit?

Mr. PETHICK-LAWRENCE: The quantity of hydrocarbon oils, classified under headings other than "motor spirit,' which was duty paid for home consumption in 1930 was 25½ million gallons, and practically the whole of this was no doubt used for industrial purposes. In addition a considerable quantity of hydrocarbon oils classified as "motor spirit" is used for industrial purposes. Precise statistics are not available but it is estimated that the total amount of dutiable hydrocarbon oils used for other than road purposes in 1930 was approximately 62 million gallons.

MALE SERVANT LICENCE DUTY.

Mr. DAY: 48.
asked the Chancellor of the Exchequer whether, in view of the present unemployment, he will consult with the various local authorities with a view to obtaining their consent to the abolition of the local taxation duty which imposes a tax of 15s. on all male domestic servants?

Mr. PETHICK-LAWRENCE: My right hon. Friend does not see his way to institute such an inquiry.

Mr. DAY: Was not a similar tax on female servants remitted some years ago: and does not the hon. Gentleman think that those who employ male servants are entitled to the same privilege?

SURTAX.

Mr. TINKER: 49.
asked the Chancellor of the Exchequer the total amount assessable to Surtax for the financial years ended 1929–30 and 1931?

Mr. PETHICK-LAWRENCE: My hon. Friend will find the latest available information of assessments to Super-tax in Table 63 on page 88 of the recently published 73rd Annual Report of the Commissioners of Inland Revenue (Command Paper No. 3802). Information for the years mentioned in the question is not yet available.

LAND VALUE TAX.

Mr. SMITHERS: 50.
(for Colonel RUGGLES-BRISE) asked the Chancellor of the Exchequer if he will inquire in what countries, if any, a similar form of Land Value Tax to that proposed in the Finance Bill is in operation; and what is the unit of valuation and the rate of the tax in such countries?

Mr. PETHICK-LAWRENCE: A Land Value Tax is in force for national purposes in Denmark, New Zealand, the Commonwealth of Australia, Queensland, Victoria, Tasmania, South Australia and West Australia. The hon. and gallant Member will no doubt be aware that in several countries also the site value of land forms the basis of taxation for local purposes. Generally speaking, the unit of valuation is each piece of land that is in separate occupation. To answer the last part of the question would involve a detailed examination of the various statutory provisions of the respective countries or States. I will see if the information can be furnished in summary form without an undue expenditure of time and labour.

Mr. HORE-BELISHA: Will the Government issue a White Paper on this matter showing the full effect for the guidance of Members?

Mr. PETHICK-LAWRENCE: I will submit that point to my right hon. Friend.

Oral Answers to Questions — GOVERNMENT PROPERTIES (SALE).

Brigadier-General BROWN: 51.
asked the Financial Secretary to the Treasury what Government lands or properties have been sold since 1929 up to date; what is the total amount they were sold for; and whether these properties are now in the hands of private persons or local authorities?

Mr. PETHICK-LAWRENCE: I am afraid that I cannot add anything to the reply which I gave to the hon. and gallant Member on the 12th May.

Brigadier-General BROWN: What was the object of the Chancellor of the Exchequer in setting up the Howard Frank Committee to advise on the selling of Government property, if no land has been sold?

Mr. PETHICK-LAWRENCE: The hon. and gallant Member is not correct in saying that no land has been sold. In the answer which I gave him I told him that land had been sold, but it would be a matter of very great trouble to give a complete list of all the parcels of land sold, and the prices.

Brigadier-General BROWN: How can the Government justify selling land to private people, while at the same time introducing legislation to fine private people for owning land?

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS (COMMUTATION).

Major Sir HERBERT CAYZER: 54.
asked the Minister of Pensions whether, in cases where a retired regular officer makes application for commutation of pension supported by an opinion of his medical practitioner that he is a fit case for commutation and that such would be in the interests of the officer, he will sympathetically consider recommending such a case to the commutation board for. medical examination by that board before a decision is given in regard to the application?

The MINISTER of PENSIONS (Mr. F. O. Roberts): I can only add to the reply which I gave to the hon. and gallant Member on 20th April last that any medical evidence as to his state of health which an officer might submit would always receive full consideration by the Ministry of Pensions.

Oral Answers to Questions — POSTAL SERVICES (WELWYN).

Lieut.-Colonel FREMANTLE: 55.
asked the Postmaster-General what action he proposes to take on the representations made to him by the Welwyn Garden City Chamber of Commerce with a view to securing a later collection of outward mail; and whether, seeing that the latest times for posting at Welwyn Garden City and Hatfield, respectively, are 8 p.m. and 8.45 p.m., he will arrange to substitute for these times the latest times which will enable letters to be conveyed by the last daily train from these towns to London.

The ASSISTANT POSTMASTER-GENERAL (Mr. Viant): The final collec-
tion from the Welwyn Garden City and Hatfield Post Offices is made at 8.25 p.m. and 8.45 p.m. respectively. These times compare - favourably with those in force at similar offices, and I regret that I am unable to sanction the heavy additional expense which would be necessary to give effect to the hon. and gallant Member's suggestion.

Lieut.-Colonel FREMANTLE: Is the Postmaster-General content to act according to the conditions prevailing elsewhere; and is it not possible to use the actual conditions which exist in this case, at the moment, as there is now a train three hours later?

Mr. VIANT: I may inform the hon. and gallant Member that a revision is at present taking place, and that we hope to be able to give a better service.

Oral Answers to Questions — ROYAL NAVY.

CINEMATOGRAPH APPARATUS.

Mr. PAY: 60.
asked the First Lord of the Admiralty the number of ships of His Majesty's Navy that are fitted up with the necessary machines and equipment for the exhibition of cinematograph films; and the number of these that can exhibit sound films?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Ammon): None of His Majesty's ships is fitted officially with silent cinematograph apparatus; and I have no information as to the number of ships which possess portable silent apparatus—as the property of the ships' companies. As regards the last part of the question, the answer given to my hon. Friend on 29th April (OFFICIAL REPORT, column 1635) still holds good.

Mr. DAY: Does that mean that none of the ships already fitted with silent machines can be used for "talkies" in any way?

Mr. AMMON: I cannot answer that question. These machines are the property of the officers and men and have nothing to do with the Admiralty.

TOBACCO SUPPLIES.

Sir H. CAYZER: 61.
asked the Parliamentary Secretary to the Admiralty the country of origin of the bulk of the
tobacco supplied to the Navy; and whether any Empire-grown tobacco is supplied?

Mr. AMMON: The bulk of the tobacco purchased for the Navy is of American origin, but offers of Empire tobacco also are invited and purchases of the latter have been included when quality and price have been satisfactory. In recent years it has been found possible to increase substantially the quantity of Empire tobacco bought.

Oral Answers to Questions — AVIATION.

MEMBERS OF PARLIAMENT (AIRCRAFT FLIGHTS).

Mr. MANDER: 62.
asked the UnderSecretary of State for Air if he will make arrangements to permit Members of this House to make flights in new types of aircraft constructed for the Royal Air Force from time to time?

The UNDER-SECRETARY of STATE for AIR (Mr. Montague): My Noble Friend regrets that training and other service exigencies preclude the making of any such general arrangement as the hon. Member suggests. A special enclosure is, of course, provided for Members of this House at the display, when an opportunity is afforded them of seeing new and experimental aircraft as well as typical units of the Royal Air Force.

CIVIL CONSULTATIVE COMMITTEE.

Mr. MANDER: 63.
asked the UnderSecretary of State for Air the names of the present members of the Civil Aviation Advisory Committee; how many meetings have been held during the past year; and what results have been obtained?

Mr. MONTAGUE: The present members of the Civil Aviation Consultative Committee, to which I assume the hon. Member refers, are Sir A. G. Anderson, K.B.E.; Captain Sir W. Brass, M.P.; Mr. J. Quirey, C.B.E.; Lieut.-Colonel M. O'Gorman, C.B.; Lord Snell, C.B.E.; and myself as Chairman. Twelve meetings have been held, six of which took place during last year, and four reports have been presented to date.

Mr. MANDER: Will these reports be made available to Members of this House or are they confidential?

Mr. MONTAGUE: The reports are confidential, but, if the hon. Member wishes to know the terms of the reports I will see what can be done.

Oral Answers to Questions — UNEMPLOYMENT (COMPARATIVE STATISTICS).

Mr. TINKER: 64.
asked the Minister of Labour the unemployed figures for the United States of America and Germany in May, 1929; and what are the latest figures available?

The MINISTER of LABOUR (Miss Bondfield): As the reply is long, with my hon. Friend's permission, I will circulate it in the OFFICIAL REPORT.

Sir N. GRATTAN-DOYLE: Is the right hon. Lady satisfied as to the authenticity of the reports which have been received; and can she say whether they are comparable with the reports of our own labour organisation?

Miss BONDFIELD: I have explained on more than one occasion that, in some respects, the method of collecting statistics is not comparable to our own. I have pointed out the differences on many occasions.

Sir N. GRATTAN-DOYLE: If they are not comparable, will the right hon. Lady state the differences between the two systems?

Miss BONDFIELD: I have done so.

Following is the reply:

The statistical authorities of the United States of America do not collect regular statistics of unemployment. The index of employment in manufacturing industries, compiled by the United States Bureau of Labour Statistics, was 99.2 in May, 1929, and 74.8 in March, 1931, the monthly average employment in manufacturing industries in the year 1926 being taken as 100. Among members of trade unions, in 24 cities, affiliated to the American Federation of Labour, 11 per cent. were reported to be unemployed in May, 1929, and 25 per cent. in April, 1931. The number of persons recorded by the German public Employment Exchanges as unemployed was 1,350,000 at the end of May, 1929 and 4,389,000 at the end of April, 1931. Among members of German trade unions reporting upon
unemployment, the percentage wholly unemployed was 9.1 in May, 1929, and 33.6 in March, 1931. In addition, there were 6.8 and 18.9 per cent., respectively, on short time at the two dates.

Oral Answers to Questions — COST OF LIVING.

Mr. BEN RILEY: 66.
asked the Minister of Labour whether she can give the present cost-of-living figures in relation to the pre-War cost of living in the following countries: France, Germany, Czechoslovakia, Belgium, and Italy?

Miss B0NDF1ELD: The latest available cost-of-living statistics relating to the countries named are published on page 202 of the current issue of "The Ministry of Labour Gazette," a copy of which I am sending to my hon. Friend.

Oral Answers to Questions — INDIA.

BURMA (SITUATION).

Mr. O. LEWIS: 67.
asked the Secretary of State for India if he has any further statement to make with regard to the rebellion in Burma?

Mr. WILLIAM WHITELEY (Lord of the Treasury): I have been asked to reply. My right hon. Friend is circulating a statement covering the events of last week.

Following is the statement:

Situation in Burma for week ending 17th May, 1931.

In the Tharawaddy and Insein Districts the most important event in the past week was the discovery of four rebel camps in the jungles in the Insein District, probably the headquarters of Tharawaddy and Insein rebels. The camps were stormed by the 2/15th Punjabis on 13th May, and heavy casualties are reported to have been suffered by the rebels, who fled. The camps were destroyed and large quantities of ammunition, food and important documents captured. On the Government side the casualties were one sepoy dangerously and one policeman slightly wounded. The effect of this success may be far reaching. Elsewhere sporadic dacoities continue.

In Henzada the position remains much the same. There was one daring raid, probably by rebels from Tharawaddy and Insein Districts, on the police station in Henzada Town which was repulsed with the loss of four killed and three sepoys wounded. In Prome the bodies of Mr. W. H. Austin and the remaining police were found on 12th May and taken to headquarters for burial. The rising has not spread beyond the four villages originally implicated, and the rebels are believed to have fled towards the jungle on the east with the possible intention of attempting to cross the hills into the Toungoo District. They are being followed up.

In Thayetmyo the rebellion is still confined to the extreme south of the district where the rebels were severely defeated on 7th May at Mezali Mindon, 21 being killed, 14 captured and others wounded. There were no Government casualties. Since then the rebels are reported to have retreated southwards and arrangements are being made for Burma Rifles to attack them.

2. The attacks by Burmans on Indians in the Hanthawaddy District have been repressed and the situation is now reported to be under control. The anti-Indian movement which showed signs of spreading to Pyapon has now ceased.

3. Reports of tattooing and projected risings have come in from the Toungoo, Myingyan, Mandalay and Bassein Districts. Prompt action has been taken to round up suspected villagers and it is hoped that the danger has been averted.

4. The monsoon has commenced in Lower Burma where heavy rain is now falling. It is hoped that the situation there will now quieten down, but the economic situation remains very difficult.

5. On the morning of the 17th May, Lieut.-Colonel H. T. Morshcad. D.S.O., Director of the Burma Circle, Survey of India, was shot dead while riding in the jungle in the neighbourhood of Maymyo. It is not yet known whether his death was the result of a deliberate attack.

NORTH-WEST FRONTIER OPERATIONS (MEDAL).

Mr. REID: 68.
asked the Secretary of State for India whether the transfrontier operations for the protection of Peshawar and its neighbourhood, which
took place from 14th October, 1930, to 24th March, 1931, will be recognised as active service; and whether the troops engaged therein will be entitled to a general service medal, seeing that the British and Indian troops so employed suffered hardships and appreciable casualties in these operations?

Mr. WILLIAM WHITELEY: My right hon. Friend is sending the hon. Member copies of the replies given to the hon. and gallant Member for Wycombe (Sir A. Knox) on the 6th and 18th May, which explain the position.

Oral Answers to Questions — BLIND PERSONS ACT.

Mr. MANSFIELD: 70.
asked the Minister of Health if, in view of the hardships at present being endured by many blind persons in this country, the Government will consider introducing legislation in the near future to amend the Blind Persons Act with a view to increasing their present pensions?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Miss Lawrence): My right hon. Friend regrets that at present he cannot contemplate the introduction of legislation to amend the Blind Persons Act. Local authorities have powers under the Act to supplement the pensions payable to blind persons where need is shown, and the large majority of the authorities are already exercising these powers.

Oral Answers to Questions — PATENT MEDICINES.

Mr. HAYDN JONES: 71.
asked the Minister of Health whether he proposes to introduce legislation to give effect to the recommendations of the Select Committee on Patent Medicines, whose report was issued in 1914?

Miss LAWRENCE: My right hon. Friend fears that owing to the present state of business, the Government are unable to undertake to introduce legislation on this subject during the present Session.

Oral Answers to Questions — HOUSING (LANCASHIRE).

Mr. HERBERT GIBSON: 73.
asked the Minister of Health the number of work-
ing-class houses that have been built, since 1st June, 1929, in each of the areas covered by the following Lancashire councils: the Mossley Borough Council, the Denton Urban District Council, the Audenshaw Urban District Council, and the Failsworth Urban District Council?

Miss LAWRENCE: The numbers built with State assistance were 90, 58, 33, and 9, respectively. The numbers of houses of a rateable value not exceeding £26 built without State assistance in 12 months ended 31st March last were 2, 22, 87, and 15, respectively.

Oral Answers to Questions — MERCANTILE MARINE (LOAD LINE).

Rear - Admiral BEAMISH: 9.
(for Colonel BURTON) asked the President of the Board of Trade whether he is now in a position to state what action, if any, he proposes to take regarding the Plimsoll line?

Mr. W. GRAHAM: A Bill was recently introduced in another place which contains provisions for amending the law as to load line so as to enable effect to be given to the International Load Line Convention, 1930.

Rear-Admiral BEAMISH: Can the right hon. Gentleman say whether these conventions must be ratified by a particular date; do the Government expect that they will be able to ratify them by that date; and what is the date?

Mr. GRAHAM: I cannot recall the date off-hand. There is, of course, a specific date when the conventions come up for ratification, and it is in order, if possible, to be ready by that date that the two separate conventions have been put in one Bill in another place, and we hope to make some progress now.

BILLS PRESENTED.

FIRE BRIGADK PENSIONS BILL,

"to amend the Fire Brigade Pensions Act, 1925," presented by Mr. Brooke; supported by Mr. Marcus, Mr. Mathers, Mr. Hopkin, Mr. Charles Brown, Viscount Elmley, Dr. Hunter and Miss Lloyd George; to be read a Second time upon Friday, 5th June, and to be printed. [Bill 157.]

RELIGIOUS PERSECUTIONS (ABOLITION) BILL,

"to amend the laws relating to blasphemy and to abolish prosecutions for the holding or expressing of opinion on matters of religion," presented by Dr. Salter; supported by Mr. Scurr, Mr. Sorensen, Mr. Wallhead, Mr. Ede and Mr. Oliver Baldwin; to be read a Second time Tomorrow, and to be printed. [Bill 158.]

FANCY JEWELLERY (STANDARD TRADE DESCRIPTIONS) BILL,

"to amend the Merchandise Marks Acts, 1887 to 1926, and to define certain trade descriptions as applied to articles in the fancy jewellery and allied trades," presented by Mr. Wilfrid Whiteley; supported by Sir Austen Chamberlain, Mr. Simmons, Mr. Gossling, Mr. Longden, Mr. Sawyer and Mr. Hannon; to be read a Second time upon Friday, 5th June, and to be printed. [Bill 159.]

HOSPITAL LOTTERIES.

Sir WILLIAM DAVISON: I beg to move,
That leave be given to bring in a Bill to authorise the raising of money by means of lotteries for the support of hospitals, and to make provisions incidental thereto.
The House is probably aware that for some time past I have been pressing on the attention of the Secretary of State for the Home Department the many anomalies and inconsistencies of the law with regard to lotteries, raffles and sweepstakes in this country; and, as the Home Secretary was good enough to say that he had an open mind on the matter and looked for guidance in a general demand for him to take action, I furnished him with a memorial signed in a few hours by some 70 Members of this House of all parties asking him to take the matter into consideration. I also furnished him with the results of a questionnaire which was recently sent out by the Special Appeal Committee of St. Bartholomew's Hospital in connection with their appeal for funds to some thousands of representative people, including the supporters of the hospital. I am informed that the result of that questionnaire to date is that 3,125 persons are stated to be in favour of a lottery in aid of the hospital, and only 61 are against. Meanwhile, nothing is being
done, and our British hospitals are in the greatest need of funds for building, equipment and maintenance. We are all aware of the appeals that are reaching us week by week from various hospitals. Only a few days ago I received by post from a large hospital a pin; with the pin was a letter which said, "You are not to keep this pin, but you are to return it, using it to pin a cheque on the appeal which is sent herewith." I only mention that to show the expedients to which hospitals are reduced in order to raise funds.
I am aware that there are a number of hon. Members who consider that hospitals should be a charge upon the State, but even they must surely realise, in view of the statement which was made by the Chancellor in opening his Budget, that it is not practical politics under present financial conditions to think that any State funds will be available for hospitals in the immediate future. The chairman of a large hospital, in a letter to the "Times" a few weeks ago, pointed out that hospitals were being seriously prejudiced by reason of the uncertain state of the law with regard to this matter, and he pointed out that they were losing subscriptions, both from those who were in favour of lotteries and from those who were opposed to them.
For that reason, also, I submit that it is desirable that this state of uncertainty should be ended so far as hospitals are concerned. Many of the public who receive these appeals naturally have in mind the immense sums raised in Dublin in aid of the Southern Irish hospitals. Within the last year some £600,000 was raised for Irish hospitals, and it is expected that the lottery now in progress will raise a further £500,000 for them.
The Bill which I hope the House will be good enough to allow me to introduce is really an unambitious Measure. Under the Ten Minutes Rule it is obviously impossible to introduce a Bill which would codify the law or remove the many anomalies concerning lotteries, raffles and sweepstakes. This is a short, permissive Measure which leaves the law as it is until such time as the Government are in a position to deal with it, but proposes that, notwithstanding anything in the existing law, a lottery may be held under regulations to be approved by the Secretary of State for the Home Department
for the benefit of British hospitals—some-thing on the lines of the Irish Free State Hospitals Lottery, but with improved regulations, as the result of experience gained in the conduct of that lottery. The Bill does not refer to Northern Ireland, as I felt that a matter of this sort is one to be dealt with by the Parliament of Northern Ireland. I need not remind the House that there is nothing inherently vicious in the idea of a lottery. From the earliest times the casting of lots has been a method of deciding what is the Divine will in a matter of doubt. If hon. Members will study their Bibles they will find how, again and again, matters of doubt were decided by the casting of lots. I am not saying anything irreverent in saying that, I am merely pointing out that, inherently, there is nothing immoral or wrong in lotteries.
For many years State lotteries for public purposes were conducted in this country. The British Museum, of which we are all so proud, was started by a State lottery. The first Royal patron of lotteries, so far as I am aware, was Queen Elizabeth, and Mr. Shoolbred, in his admirable little book on lotteries, states that this lottery had as its object the provision of funds towards the reparation of the havens, the strengthening of the Realm and other public good works. Years passed, and abuses crept in. Various Acts of Parliament were passed to deal with them, enacting the most terrible penalties, from whipping, at the instance of two justices of the peace, to death as a felon without benefit of clergy. I do not wish unduly to alarm Members of Parliament, but I am told that those Acts have not been repealed. Be it remembered that under practically all the Lottery Acts the main object has been not to prohibit lotteries as such, but to make unlawful the competition of private lotteries and foreign lotteries with British State lotteries for public purposes.
Indeed the Lottery Act of 1823, some 35 pages long, which can be found in the Library, and enacted the penalties to which I have referred, was stated in its preamble to be an Act for granting to His Majesty a sum of money to be raised by lottery. Another Act was passed in 1834, 11 years afterwards, and that is the Act which is to-day being
used by the Customs authority, at the instance of the Financial Secretary, to allow persons landing at Holyhead to be searched for Irish lottery tickets. As the House is aware from the description given the other day by my hon. and gallant Friend the Member for Chelmsford (Colonel Howard-Bury), very serious difficulties have occurred not only with citizens of the Irish Free State, but also with American citizens, who have landed in the Irish Free State on their way to England and have purchased, as they were legally entitled to do, books of Irish lottery tickets. At Holyhead they have had their pockets rifled and the books taken from them. In addition to that letters are being opened, and there is a whole system of espionage which is contrary to English ideas. I submit, also, that it is a bad thing for a country when the law is openly broken by all classes with general approval. These lottery tickets are on sale everywhere throughout the country. Is it desirable that we should have here a repetition of the American farce of Prohibition, with its attendant crimes and subterfuges? Do let us look facts in the face, and get rid of cant and hypocrisy.
The State already approves of lotteries under proper public control. We have the Victory Bonds lottery for £300,000,000. Drawings take place every year, and successful people get £100 for the Bonds which they bought at £85. We have the totalisator as a national institution. The telegraph and telephone service derive a large part of their income from transmitting betting news. Newspapers of all parties have thinly disguised lotteries, including the "Daily Herald." There is not a church or chapel bazaar which does not have its little lottery. In this House there is a daily lottery for tickets for the Strangers Gallery; and, more than that, I myself yesterday took two tickets, costing 7s. 6d. each, in a lottery which is being conducted by Mr. Speaker for the much-coveted prize of seats in the House of Commons stand at the Trooping of the Colour. The instances I have given show that there is no inherent immorality in a lottery, and my Conservative friends will no doubt have observed that at the large meeting of representatives of women's organisations in connection with the National Union at Queen's Hall on Thursday last it was unani-
mously decided that the present state of the law in regard to lotteries and sweepstakes was unsatisfactory, and it was urged that they should be legalised under proper control. Why, then, should our British hospitals not benefit by a lottery under proper control? Why should our British citizens be denied what they are determined to have in any event, and what we cannot prevent them from having, and that is an innocent flutter which will go some way to relieve the gloom and anxiety of these hard times, will do no harm, will create no new crime, and, at the same time, will be of immense benefit to our hospitals, and, through them, to our people who are sick and suffering. It is idle to suggest that this would sap the morality of our country.

Mr. POTTS: On a point of Order. I understand that the hon. Member is introducing this Bill under the Ten Minutes Rule, and he has already been speaking for 14 minutes.

Sir W. DAVISON: On a point of Order. I submit that the actual time for which a Member can speak is within the discretion of the Chair. It is not an actual limit of 10 minutes; that is only a general phrase. I have only one other sentence.

Mr. SPEAKER: Hon. Members must not forget that in asking leave to introduce Bills under what is known as the Ten Minutes Rule they have no more than the privilege of making a short explanatory statement of the provisions of a Measure.

4.0 p.m.

Sir W. DAVISON: I have only one more sentence. We have seen a properly-controlled hospital sweepstake in Ireland during recent months. Has it undermined the morality of the Irish Free State? Has there been any protest from the Cardinal Archbishop or the priests of the Roman Catholic Church who are particularly concerned with the morality of the people of Southern Ireland.

Mr. FOOT: I ask the House to reject this Motion. Although it is only a Bill brought in under the Ten Minutes Rule, it deals with a vital matter, and I think it will be agreed, whatever are the differences in this House, that very grave issues are raised in this proposal. It is not a
Bill to get rid of legal anomalies. I admit that there are anomalies relating to our betting laws. They are like the laws that Oliver Cromwell once described as "a tortuous and ungodly jumble." This is not a Bill asking for an inquiry. I am all for an inquiry. This is not a Bill for the straightening out of the law. This is a Bill which prejudges the inquiry and demands from this House a verdict before the evidence has been given. It is a Bill for legalising lotteries. We are asked to go back more than a hundred years, and I am surprised at the temerity of the hon. Member in referring to the fact that we had lotteries in this country, because if he will turn to the report—it is one of the most scathing reports ever published by a Select Committee of this House—which led to the abolition of lotteries in this country a century ago, he will see the condemnation of his proposals. No Member ought to vote for the restoration of lotteries in this country unless he has read that report. There is one paragraph in it which says:
No mode of raising money appears to the committee so burdensome, so pernicious, and so unproductive; no species of adventure is known where the chances are so great against the adventurer; none where the infatuation is more powerful, lasting and destructive.
That was in 1808, and, as a result of the report of that Select Committee, which said that evils were inseparable from lotteries leading to a mournful catalogue of calamities and crime, lotteries were altogether abolished in this country. That opinion expressed in 1808 has been confirmed every time an inquiry has been made in succeeding years. The Bill cannot be limited to hospitals. If it is right for hospitals, it is right for the blind, for orphanages and for every beneficent enterprise, national and municipal. This is a charity lottery. I submit that it would not achieve its purpose. It would dry up the sources of charity. The man who will bay a sweepstake ticket will be tempted to feel that he has discharged his responsibility. Take what goes to the hospitals. My hon. Friend again had the temerity to take, for example, what happened in Dublin. I have figures for the sweepstake there in November, 1929. The recent figures are more remarkable, but in that sweepstake there was a total sum raised from the pockets of the purchasers of £798,433, of which
£249,000 went in expenses, organisation and the selling of tickets and £417,000 went in prizes. Out of the sum of £798,433, the hospitals took £131,671. In other words, out of each 1s. raised ostensibly to help the sick, maimed and weak, 2d. went to the avowed purpose of the scheme. [Interruption.]
I am surely entitled to quote some of the leading authorities in this country upon this matter. A short time ago the Earl of Onslow, at one time the chairman of the Voluntary Hospitals Commission, wrote a letter to the "Times" setting out his reasons—I have no time to quote them—in which he condemned this proposal as one that would be disastrous to the financial interests of the hospitals of this country. We have the same opinion recently given in the "Times" by Sir Theodore Luling, chairman of the Royal London Ophthalmic Hospital, and I could quote the same opinion given this year by Sir Arthur Stanley, treasurer of St. Thomas' Hospital. The "Manchester Guardian" sought the opinion of 13 prominent members of the Manchester hospital boards. Two declared in favour of the proposal, one was neutral, and 10 declared against it. The house governor of Charing Cross Hospital, Mr. Philip Inman, in an interview this month, said:
Speaking for myself and this hospital, we will have neither part nor lot in any such schemes. And our reasons are not simply moral ones, though they weigh very considerably. Looking from simply a business standpoint, we believe that the gains would be outweighed by the losses.
He submits that this is a craze, and that when the craze is past hospitals would be left in a desperate position. He says that in the North they regard betting as being a mug's game with a ten to one chance. What sort of a game is it with a chance of 100,000 to one? Even if successful, the success would be at too great a price. These methods would poison the wells of charity. You cover cupidity with a thin smear of charity. You cannot reconcile an appeal to self-sacrifice and personal gain. The good Samaritan would have taken a very different place in history if he had sought to discharge his responsibility to his distressed neighbour by spending his twopence on the purchase of a ticket in the Jericho Hospital Sweepstake. The hon. Member asks what protest has been made in Ireland? Protests
have already been made in Dublin. A very heavy responsibility rests, I believe, upon the spiritual guides and the social leaders and statesmen of the Irish Free State for what is happening there. I may quote what was said, not by any ordinary person, but by a business society. The Dublin Mercantile Association, on 22nd April last, made this public declaration:
We have also seen during the past year, a very disquieting increase in the desire of many of getting something for nothing …. and we have asked the attention of the business section of the population to the great danger to its interests by the tremendous increase in gambling now legalised in the Irish Free State… Consequently we have ventured to put our views before the Ministers of the Government as follows:
That we view with concern the amount of gambling in the Free State, which diverts both energy and money from industry and commerce, and causes grave disturbance to the public mind.
Against this proposal we have the overwhelming opinion of the churches of this country, and those who are working for social betterment. Here is an evil which has admittedly been open, gross and palpable. I believe that the first result of this proposal would be to discourage the churches and our social workers. I am sure that it would give enlargement to the evil. It would have the commendation of Parliament and the imprimatur of Government. This enemy of the people would be dressed up in the livery of the State. I will quote, in conclusion, what was said by Sir Alan Anderson, chairman of the Hospital Savings Association, a few weeks ago:
Illness is not a gamble, and it would not accord with the principles on which the Hospital Savings Association appeals to its members to base the finance of healing on the unstable foundation of gambling.
It was the foolish man who built his house upon the sand. The hospitals of this country are a great institution, and I hope we shall not think to build them upon the very shifting and uncertain sands of chance, cupidity, and a perverted spirit of adventure. There is a case for public support. There is no case for basing these great ministries of healing upon something which, throughout history, wherever it has been unchecked, has wrecked homes, degraded the community, and demoralised society.

Question put,

"That leave be given to bring in a Bill to authorise the raising of money by means

of lotteries for the support of hospitals, and to make provisions incidental thereto."

The House divided: Ayes, 58; Noes, 181.

Division No. 249.]
AYES.
[4.11 p.m.


Balniel, Lord
Grattan-Doyle, Sir N.
Remer, John R.


Beaumont, M. W.
Hamilton, Sir George (Ilford)
Salmon, Major I.


Bourne, Captain Robert Croft.
Haycock, A. W.
Sandeman, Sir N. Stewart


Bowater, Col. Sir T. Vansittart
Hurst, Sir Gerald B.
Sandham, E.


Bowerman, Rt. Hon. Charles W.
Hutchison, Maj.-Gen. Sir R.
Shillaker, J. F.


Bowyer, Captain Sir George E. W.
Jones, J. J. (West Ham, Silvertown)
Taylor, Vice-Admiral E. A.


Briscoe, Richard George
Knox, Sir Alfred
Thorne, W. (West Ham, Plaistow)


Buchan-Hepburn, P. G. T.
Lamb, Sir J. O.
Tinker, John Joseph


Butler, R. A.
Lelghton, Major B. E. P.
Tinne, J. A.


Cautley, Sir Henry S.
Lewis, Oswald (Colchester)
Titchfield, Major the Marquess of


Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)
McGovern, J. (Glasgow, Shettleston)
Todd, Capt. A. J.


Church, Major A. G.
McShane, John James
Tout, W. J.


Colfox, Major William Philip
Maitland, A. (Kent, Favsrsham)
Walker, J.


Colville, Major D. J.
Manning, E. L.
Warrender, Sir Victor


Conway, Sir w. Martin
Marley, J.
Waterhouse, Captain Charles


Daggar, George
Monsell, Eyres, Com. Rt. Hon. Sir B.
Womersley, W. J.


Day, Harry
Moore, Sir Newton J. (Richmond)



Despencer-Robertson, Major J. A. F.
Moore, Lieut.-Colonel T. C. R. (Ayr)
TELLERS FOR THE AYES.—


Dugdale, Capt. T. L.
Morgan, Dr. H. B.
Sir William Davison and Colonel


Glyn, Major R. G. C.
Peake, Captain Osbert
Howard-Bury.


Graham, Fergus (Cumberland, N.)
Penny, Sir George



NOES.


Adamson, Rt. Hon. W. (Fife, West)
Gray, Milner
Marcus, M.


Allen, Lt.-Col. Sir William (Armagh)
Grenfell, D. R. (Glamorgan)
Marjoribanks, Edward


Alpass, J. H.
Groves, Thomas E.
Markham, S. F.


Amnion, Charles George
Grundy, Thomas W.
Mathers, George


Arnott, John
Hall, G. H. (Merthyr Tydvil)
Matters, L. W.


Atkinson, C.
Hall, J. H. (Whitechapel)
Middleton, G.


Ayles, Walter
Hall, Capt. W. G. (Portsmouth, C.)
Millar, J. D.


Barr, James
Hammersley, S. S.
Morris, Rhys Hopkins


Batey, Joseph
Hannon, Patrick Joseph Henry
Morrison, Rt. Hon. H. (Hackney, S.)


Bennett, Sir E. N. (Cardiff, Central)
Harbord, A.
Morrison, Robert C. (Tottenham, N.)


Benson, G.
Hastings, Dr. Somerville
Muggerldge, H. [...].


Bevan, Aneurin (Ebbw Vale)
Henderson, Arthur, Junr. (Cardiff, S.)
Muirhead, A. J.


Bondfield, Rt. Hon. Margaret
Henderson, W. W. (Middx., Enfield)
Murnin, Hugh


Bowen, J. W.
Herriotts, J.
Noel-Buxton, Baroness (Norfolk, N.)


Brockway, A. Fenner
Hirst, G. H. (York W. R. Wentworth)
Oliver, P. M. (Man., Blackley)


Bromfield, William
Hirst, W. (Bradford, South)
O'Neill, Sir H.


Brothers, M.
Hoffman, P. C.
Owen, Major G. (Carnarvon)


Buchan, John
Hollins, A.
Palin, John Henry


Buckingham, Sir H.
Hopkin, Daniel
Paling, Wilfrid


Buxton, c. R. (Yorks. W. R. Elland)
Hore-Belisha, Leslie
Parkinson, John Allen (Wigan)


Cadogan, Major Hon. Edward
Hudson, James H. (Huddersfield)
Perry, S. F.


Carter, W. (St. Pancras, S. W.)
Hunter, Dr. Joseph
Pethick-Lawrence, F. W.


Chamberlain, Rt. Hn. Sir J. A. (Blrm., W.)
Isaacs, George
Potts, John S.


Chamberlain, Rt. Hon. N. (Edgbaston)
John, William (Rhondda, West)
Raynes, W. R.


Charleton, H. C.
Jones, Henry Haydn (Merioneth)
Reynolds, Col. Sir James


Chater, Daniel
Jones, Rt. Hon. Leif (Camborne)
Richardson, R. (Houghton-le-Spring)


Collins, Sir Godfrey (Greenock)
Jones, Morgan (Caerphilly)
Riley, Ben (Dewsbury)


Compton, Joseph
Kennedy, Rt. Hon. Thomas
Romeril, H. G.


Cowan, D. M.
Kinley, J.
Rosbotham, D. S. T.


Cranborne, Viscount
Knight, Holford
Rothschild, J. de


Cripps, Sir Stafford
Lambert, Rt. Hon. George (S. Molton)
Russell, Richard John (Eddisbury)


Dallas, George
Lang, Gordon
Salter, Dr. Alfred


Davies, E. C. (Montgomery)
Law, Albert (Bolton)
Samuel, A. M. (Surrey, Farnham)


Davies, Rhys John (Westhoughton)
Law, A. (Rosendale)
Samuel, Rt. Hon. Sir H. (Darwen)


Denman, Hon. R. D.
Lawson, John James
Samuel, H. Walter (Swansea, West)


Ede, James Chuter
Leach, W.
Sanders, W. S.


Edmunds, J. E.
Lee, Frank (Derby, N. E.)
Sawyer, G. F.


Edwards, C. (Monmouth, Bedwellty)
Lee, Jennie (Lanark, Northern)
Scott, James


Elmley, Viscount
Lloyd, C. Ellis
Scrymgeour, E.


England, Colonel A.
Logan, David Gilbert
Sexton, Sir James


Freeman, Peter
Longbottom, A. W.
Shakespeare, Geoffrey H.


Gardner, B. W. (West Ham, Upton)
Lovat-Fraser, J. A.
Shepherd, Arthur Lewis


George, Major G. Lloyd (Pembroke)
Lunn, William
Sherwood, G. H.


Gibbins, Joseph
Macdonald, Gordon (Ince)
Simmons, C. J.


Gibson, H. M. (Lancs, Mossley)
MacDonald, Malcolm (Bassetlaw)
Simon, E. D. (Manch'ter, Withington)


Gill, T. H.
McElwee, A.
Simon, Rt. Hon. Sir John


Glassey, A. E.
McKinlay, A.
Sinclair, Sir A. (Caithness)


Gossling, A. G.
MacLaren, Andrew
Sinkinson, George


Gould, F.
MacNeill-Weir, L.
Smith, Frank (Nuneaton)


Graham, Rt. Hon. Wm. (Edin., Cent.)
Mander, Geoffrey le M.
Smith, Lees-, Rt. Hon. H. B. (Keighley)


Granville, E.
Mansfield, W.
Smith, Louis W. (Sheffield, Haliam)


Smith, Rennie (Penistone)
Ward, Lieut.-Col. Sir A. Lambert
Whiteley, William (Blaydon)


Snowden, Thomas (Accrington)
Watkins, F. C.
Wilkinson. Ellen C.


Stamford, Thomas W.
Watson, W. M. (Dunfermline)
Williams, David (Swansea, East)


Strauss, G. R.
Wedgwood, Rt. Hon. Josiah
Wilson, R. J. (Jarrow)


Sutton, J. E.
Wellock, Wilfred
Winterton, G. E.(Leicester, Loughbgh)


Taylor, W. B. (Norfolk, S. W.)
Welsh, James (Paisley)
Wood, Major McKenzie (Banff)


Townend, A. E.
Welsh, James C. (Coatbridge)



Vaughan, David
West, F. R.
TELLERS FOR THE NOES.—


Viant, S. P.
Westwood, Joseph
Mr. Isaac Foot and Mr. Cecil Wilson.


Walkden, A. G.
White, H. G.



Wallace, H. W.
Whiteley, Wilfrid (Birm., Ladywood)

MESSAGE FROM THE LORDS.

That they have agreed to,—

Local Authorities (Publicity) Bill, without Amendment.

That they have passed a Bill, intituled, "An Act to provide for amalgamation of the undertakings of the Brodsworth and District Gas Company, the South Elmsall and District Gas Company, and the Royston (Yorks) and District Gas Company, Limited; to incorporate and confer powers on the Royston and Brodsworth Gas Company and vest in that Company the amalgamated undertakings; and for other purposes." [Royston and Brodsworth Gas Bill [Lords].]

Also a Bill, intituled, "An Act to confer further powers on the Ashton-under-Lyne, Stalybridge, and Dukinfield (District) Waterworks Joint Committee and the authorities represented upon that Committee; to extend the limits of supply of the said Committee; and for other purposes." [Aston-under-Lyne, Stalybridge, and Dukinfield (District) Waterworks Bill [Lords].]

And also a Bill, intituled, "An Act to authorise the Felixstowe and Walton Waterworks Company to construct new works and to raise additional capital; to extend the Company's limits of supply; to change the name of the Company; and for other purposes." [Felixstowe and District Water Bill [Lords].]

ROYSTON AND BRODSWORTH GAS BILL [Lords].

ASHTON-UNDER-LYNE, STALYBRIDGE, AND DUKINFIELD (DISTRICT) WATERWORKS BILL [Lords].

FELIXSTOWE AND DISTRICT WATER BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills.

BILLS REPORTED.

SOUTHAMPTON CORPORATION BILL.

Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.

AGRICULTURAL MARKETING BILL.

Reported, with Amendments, from Standing Committee B.

Report to lie upon the Table, and to be printed.

Minutes of Proceedings to be printed.

Bill, as amended (in the Standing Committee), to be considered upon Tuesday, 2nd June, and to be printed. [Bill 156.]

Orders of the Day — FINANCE BILL.

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time".

Mr. CHAMBERLAIN: I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof the words:
this House declines to give a Second Heading to a Bill which fails to provide the resources necessary to balance the Budget, inflicts grave hardship and injustice on a selected class of income taxpayer, and introduces a now tax on one particular form of capital, thereby destroying confidence in all transactions in laud, imposing fresh burdens on industry, commerce, and educational establishments, jeopardising the development of housing estates, threatening both the amenities of the countryside and the existence of sports and playing fields, and increasing the already overwhelming amount of unemployment in the country.
In moving this Amendment, I feel that I must once again enter my protest at the shortness of time which has been allotted by the Government to the Second Reading of this momentous Bill. The Amendment draws attention to three principal defects of the Bill, and at least two of these are sufficiently important to justify a whole day being given to each of them. For reasons which I do not understand, the President of the Board of Trade has not moved the Second Reading of the Bill in a speech, and we are again in the presence of a situation which has pursued us all through our discussions upon the Budget. The speeches of the Opposition have always had to be made in ignorance of the Government's case. I trust that the right hon. Gentleman will not follow the precedent which has been set up by keeping us waiting until the end of the Debate before we hear what the Government have to say in defence of their proposals.
The Amendment calls attention, in the first place, to the false picture of the nation's financial affairs presented by what we feel bound to stigmatise as a dishonest Budget. In the second place, it points out the injustice which is going to be inflicted upon a small section of the Community, who are unorganised and
unable to put up any adequate defence of their own interests, but who have never been accused by anybody of having failed in the duties of good citizenship. Thirdly, we have to comment upon a new impost, which has been devised rather in the interests of political propaganda than in those of the national interest, a proposition insufficiently thought out and one calculated to disturb the confidence which, above all things, is required in the country to-day. It is one which is rather devised to hamper than to cure the unemployment under which we are suffering.
Something like two-thirds of the Finance Bill is taken up with the proposals for the valuation and taxation of land, but, in my opinion, the more important consideration, and certainly the more urgent consideration, before us, is the general financial aspect of the Budget, and the failure of the Finance Bill to provide the resources which are necessary to effect a balance. The tax which it is proposed to impose upon land—

Mr. MacLAREN: Value.

Mr. CHAMBERLAIN: —upon land value, although I do not know what the difference is, shall not become operative for two years. The Government would have to pay a high premium, if they were to insure their life for so long a period as that. The finances of the present year are before us now. I do not think the Government would find an auditor prepared to say on this Budget, in the well-known and customary words, that he has "obtained all the information and explanations" which he has required, and that the Budget is "properly drawn up so as to exhibit a true and correct view" of the state of the country. In his opening statement the Chancellor estimated for a nominal surplus of £134,000, and yet already, before a single Supplementary Estimate has been introduced, we have been told that the cost of the valuation of the land which will fall upon this year's finances will amount to between £300,000 and £400,000. The Chancellor's nominal surplus is already converted into a deficit. It must be remembered that, in making this estimate of a nominal surplus, the Chancellor excluded every possibility of a mistake on the
wrong side in the calculation of expenditure. But he screwed up his estimate of the revenue to a level which every competent observer declares to be dangerously near to a gamble. What hope does the present condition of the Stock Exchange give us that the Stamp Duties are going to produce £3,500,000 more than they did last year? What hope do the present prices of securities give us that the Death Duties are going to give us something like £7,500,000 more than they did last year? Is not the Chancellor's estimate, that the trading results of 1930 warranted him in expecting only £8,000,000 less in Income Tax than the trading results of 1929, in its turn dangerously optimistic?
The Chancellor of the Exchequer said in his Budget statement that he regarded the Budget as dealing with a temporary emergency. I want to point out to the House that, unless that emergency comes to an end in the course of the next few months, the Budget is not going to deal with it. Scattered all through the speech of the Chancellor of the Exchequer were passages which showed that he realised how perilous were the hazards that he was incurring. He said he hoped that we were on the point of emerging from an unprecedented slump and that he counted on some recovery in Stock Exchange activity. He hoped that the time of depression had reached its limit and he definitely contemplated that any gap in the finance of the year should be met by economy. Then came that stern and gloomy warning that, if the world depression failed to lift, a reduction of expenditure would be the only alternative to increased taxation. Failing substantial economies and some improvement in trade, heavy increase in taxation would be inevitable next year. That is pretty bad, but I have not yet touched the really vital spot, the open wound which is draining the life-blood out of what is left of industry. I remember that the hon. Member for East Leicester (Mr. Wise), in the course of the Debate on the Budget statement, said:
If the Unemployment Insurance Commission cannot substantially reduce the cost of Unemployment Insurance, as far as I can see the situation, the whole budgetary basis goes by the board."—[OFFICIAL REPORT, 28th April, 1931; col. 1518, Vol. 251.]
And yet on the bench opposite there is a conspiracy of silence as to what they intend to do about the Unemployment Insurance Fund. I am not going to follow the example of the official organ of the party opposite, and anticipate what the results of the Royal Commission's inquiry may be. Incidentally, I must take this opportunity of saying that it appears to me that the "Daily Herald," in repeatedly publishing information to which it appears to have sole access, and in commenting upon it, is guilty of the grossest impropriety. It has already been censured once by the Attorney-General, and I think it is time it was censured again by a still higher authority.
The problem which I have already put before the Committee remains the same, and would remain the same even if the Royal Commission were not sitting at all. The debt of the Unemployment Insurance Fund is to-day, I suppose, in the neighbourhood of £83,000,000, and it is increasing at the rate of £1,000,000 a week. If that borrowing at that rate is allowed to continue, we are bound to find ourselves in the position that was contemplated in the Memorandum approved by the Chancellor of the Exchequer himself, in which it was stated that we should be borrowing to meet current obligation at the expense of the future—a course of action which was one of the well recognised signs of an unbalanced Budget. If, on the other hand, the Government are going to do anything to reduce that borrowing, they will have to find out of the Exchequer a further contribution to assist in sustaining at any rate a part of the people who will be thrown out of insurance, and there is no provision in this Bill to meet that case. One or other of these courses the Government must take; there is no third way; and again, therefore, I put to them the question to which hitherto I have had no answer, but which must be answered before this Debate closes: What steps are the Government going to take to put the relations between the Exchequer and the Unemployment Insurance Fund on a satisfactory basis, and where in this Bill are the means to do it?
I do not intend to take up the time of the House in discussing the second part of the Amendment, because we shall
have opportunities of dealing with Clause 6 in Committee. I content myself with pointing out that no justification was offered by the President of the Board of Trade during the Committee stage for this proposition to accelerate the collection of Income Tax from the persons who come under certain Schedules, except the urgency of his need. I think I remember that King John used a somewhat similar argument in dealing with the Jews of his day, and he reminded them that they had no means of defending themselves. The resemblance between the President of the Board of Trade and King John is so very slight that I really sympathise with him in the position in which he finds himself when he has to defend a proposal which, I am sure, must outrage his own sense of justice. I hope that, if he cannot abandon this proposal altogether, he will at any rate, when we come to discuss it in Committee, be prepared to accept some Amendment which will be put before him to mitigate its hardships.
The third part of the Amendment is a brief catalogue of the misfortunes which, as it appears to us, are likely to follow upon the ill-judged proposition first to value and afterwards to tax the land. We might have made that catalogue very much longer, because even this dismal list does not by any means exhaust the evils which we see in front of us. We have preferred, however, on this occasion, to concentrate upon one or two salient points. In the discussions that we have had on the subject there have been three, and I think only three, attempts to justify the Government's proposal. The first attempt was that of the Solicitor-General, whose justification was that all land values were created solely by the action of the community, and that they were maintained solely by the expenditure of the same community. That argument, of course, is demonstrably false, and I imagine that it was only put forward in order to evade and conceal the fact that what the Government are proposing to do is to tax owners' improvements—a proposition which is not defended by the true and genuine land taxers, which is entirely contrary to the principles put forward by the Liberal party, and which is not to be found even in such legislation as that of Australia,
which is constantly quoted as a model to be followed in this case.
The second justification was that which appeared to be favoured by the Chancellor of the Exchequer himself, and received confirmation from the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). This argument runs that the value of land is increased by the expenditure of public money, or, alternatively, by the mere proximity of a large population, and that it is therefore only fair and right that the community should secure to them selves some portion of this unearned increment. That, I dare say, is the argument which hon. Members opposite propose to use when they come to defend this proposal in the constituencies. It is an argument for which there is a great deal to be said, and which on the face of it may appeal to the sense of fairness and justice of many people who have not examined the proposals in the Bill for themselves; but of course it is entirely irrelevant to this Bill, because the proposals with which we have to deal do not profess to be directed against unearned increment at all. The proposals in this Bill will let off altogether the man who has sold his land and pocketed the unearned increment; the man who will be taxed is the man who, in good faith, has bought the land and paid the unearned increment for it. I have very little doubt that we shall find these proposals advocated with appeals to envy, hatred, malice, and all uncharitableness. We shall be told that this is merely an attempt to get back from dukes and speculators ill-gotten and unearned gains—

Mr. THORNE: Hear, hear!

Mr. CHAMBERLAIN: I expected that—and nothing will be said about the fact that indeed this tax will fall on thousands of people who have invested the savings resulting from their thrift in freehold property. Only yesterday morning I received a letter from one of my constituents, not personally known to me, which bears so directly upon this subject that I hope the House will allow me to read one or two sentences from it. This lady writes to me:
Sir,—Re Land Taxes. I venture to write and ask you if you will kindly put forward the case of a poor spinster, alone"—
[Interruption] hon. Members sneer at the poor spinster who in her simplicity so describes herself in her letter—
who has scraped and saved all her days to purchase a little house of her own, and, with such heavy rates—£20 a year—the last straw will be these awful land taxes. I have paid myself, and very heavily too, to keep house in good order all these years since 1908, and now in my old age I am to be deprived of the results of my toil and sacrifices—it is very hard. There is no incentiva to thrift these days.

Mr. THORNE: Did she give the value of the land?

Mr. CHAMBERLAIN: She gives the amount of the rates.

Dr. MORGAN: Who put the rates on?

Mr. CHAMBERLAIN: Hon. Members immediately try to pick holes in any case which tells against them. I can assure them that they are not going to delude the country into thinking that all landowners are either dukes or speculators, and that, when people like the lady whose letter I have just read come to find out what the effect of the Land Tax is in their particular case, there will arise throughout the country such an outcry as to make hon. Members regret a thousand times that they have lent their names to such injustices as this.
The third attempt to justify these proposals is that land is being held up in order that higher prices may be obtained, so that local authorities cannot get hold of it, and, when they have to buy it, have to pay exorbitant prices for it. The argument appears to be that, by putting a tax upon the value of the land, land will be forced into the market. I have no doubt that the effect of this tax, generally speaking, will be to lower the value of land, and, in so far as it does that, it will no doubt encourage that ribbon development which we have been trying so hard to prevent, and which the Minister of Health is trying by his Town and Country Planning Bill to prevent. But I am not at all sure that, because the price of land is lowered, the buyer is going to get the benefit. On the contrary, it seems to me to be very likely that when the person who owns land which has, in addition to its cultivation value, a value for building purposes, finds
this additional charge put on to it, he will, if he can afford to do so, hold on to his land until he can recoup himself for the additional tax, and wherever that happens—and the places where it is most likely to happen are just those places which hon. Members have in their minds, that is to say, land in the neighbourhood of large towns—the tax is going to be passed on from the builder and speculator to the person who occupies the house on the land.
Is it, however, a fact that the price is holding up local authorities who are trying to get land? Is it a fact that it is raising rents so high that the working classes cannot afford to pay them? I remember that the other day a question was asked, I think by the hon. Member for North Islington (Mr. R. S. Young), which indicated that that was his opinion. He asked about the case of Becontree, and whether the exorbitant price paid for the land at Beeontree had not put up the rents of working-class houses m that district. Really, hon. Members ought to inform themselves a little more accurately, and not allow themselves to be so prejudiced that they accept statements without first looking into their correctness. I have taken the trouble to examine the facts about Beeontree, I find that a 5-room house is let at a rent, including water rate and municipal rate, of from 10s. 10d. to 21s. 3d. a week. I wonder what part of this rent the hon. Member for North Islington thinks is taken up by the price of the land. I suggested that the average cost of land per house on the county council estate was probably not more than £25 per house, but I have since found that, in this case of Beeontree at any rate, I put it much too high. The price of the land is only a little over £18 a house, so that the part of the rent which is attributable to the cost of the land out of this price of 15s. 10d. to 21s. 3d. cannot be more than 5d. per week. How perfectly ridiculous it is to suggest that the exorbitant price of land to local authorities is any justification for the proposals in this Bill. In a recent book of his Sir Cecil Levita says that land generally costs less per cottage than the linoleum to cover the floor space. The real fact is that the powers which have been conferred upon local authorities in recent years have now removed any grievance,
or any difficulty, that there may have been in past years, either in getting any land that they want for public purposes or in getting it at a fair and reasonable price.
Let me consider what are going to be the results if this Bill is passed into law in its present form. The first thing that strikes one is the absurdity of basing a tax which is to come into operation in 1933 upon a valuation that is going to be made in 1931, because long before the tax comes into operation the valuation on which it is based is going to be completely out of date, and, if that takes place in the first period of five years, it is going to appear in a far more aggravated form in subsequent quinquennia. Two years of the first quinquennium will have gone by before the tax comes into operation, but, in future five-year periods, the tax will be operating for five successive years on a basis which has become altogether inapplicable to the circumstances. It is not only the general changes which may alter the value of land, changes in the value of money or changes in the comparative attractiveness of other forms of security, but you may have specific changes occurring locally which will make very serious alterations in the value of particular pieces of land. The erection of a single factory, the building of a lunatic asylum or of a tuberculosis hospital—any one of these things may materially depreciate the value of land in its neighbourhood, and, if that takes place in between two valuations, the person who owns the depreciated land is going to be taxed on a value which has no relation to the real value.
Take another case that we have already had mentioned, the case of a town planning scheme which restricts the user of a particular part of the land. That last case is provided for in a Schedule to this Bill. An allowance is to be made in the valuation of that land on account of the restriction of user imposed by the town planning scheme. But that is not going to come into operation until the next valuation takes place. I want to know what is going to happen to the owner of the land in between the two valuations, when no alteration can take place. There is a very good parallel for this proposal in the Bating and Valuation Act, 1925, which also provided for quinquennial valuations, but there was an
elaborate provision made for alterations in the valuation list between the two valuations, and it seems to me to be an incomprehensible omission that in this Bill there is no provision made for an alteration of the valuation from one five-year period to another.
The whole range of transactions in land is going to be thrown into disorder by the doubt and the uncertainty which will exist as to what the effect of these proposals is going to be. In particular, you must take the case of housing development. It must be remembered that the housing development which has been carried out by private enterprise to so remarkable an extent during the last seven years presents peculiar features. The land speculator of to-day is the builder himself, and, in order to carry out his operations, he has to buy land two, three or even more years in advance, and, in order to finance his transactions, he presents his vacant land as security to the bank from which he borrows his money. There is going to be a depreciation in that security in consequence of these proposals. No one knows how much that depreciation is going to be, and I am perfectly certain that the doubts, the uncertainties, and the anxieties that people will feel about what the effect of these proposals is going to be will have just the same effect upon housing development as the disastrous proposals of the right hon. Gentleman the Member for Carnarvon Boroughs in 1909–10, when the increase in new houses was brought down from an annual average of 119,000 to only a little over 72,000.
There is one other doubtful point out of many which I will bring to the right hon. Gentleman's attention. Under the Town and Country Planning Bill it is proposed that a local authority shall be entitled to claim 100 per cent. of the betterment in the value of any land that is brought about by the coming into operation of a town planning scheme. What is going to happen to the owner of that land if that provision has come into operation? The land is going to be valued as though the betterment were part of it, because there is no provision in the Bill for making any allowance, and, therefore, he is going to be taxed upon the betterment of the land which has already been taken from him by the
local authority. Obviously, that is not a provision which can possibly stand criticism, and I am astonished that there should be so little communication between the Treasury and the Ministry of Health that two such contradictory provisions should exist in Bills before the House at the same moment.
The considerations which I have been putting before the House up to the present are all considerations of a general character. When you come to examine the particular cases that arise, you cannot help seeing that this Bill is going to create the gravest and most serious injustice as between one owner and another. Take the case that I have mentioned, that the owners' improvements are to be taxed. Take the case of two owners, one of whom has improved his land by making roads, or putting in drains and sewers, and perhaps by levelling land which was not suitable for building. All those improvements, which have added to the value of the land, are not to be taken into account in the valuation. What is the justification for the distinction between the two owners, one of whom has done nothing to his land while the other has spent his own money on it? In the latter case the value which has been added to the land by the owner is to be made the cause of inflicting further taxation.
Consider for a moment how these proposals are going to affect factories and industrial establishments. There, again, not only is a new burden to be placed on industry as a whole, but there is no sort of principle followed in the amount of the burden which is to fall upon different industries. Compare, for instance, a maker of, let us say, motor accessories with a shipbuilder. The man who makes motor accessories can build on a comparatively small space of land a compact factory, composed of storey above storey, in which he can turn out his products. A shipbuilder, on the other hand, has to have a great area of land. All his buildings are one-storey buildings, and the amount of tax that he will have to pay, although his business may be far less profitable than that of the factory owner, is going to be out of all proportion to it. The shipbuilding industry is now one of the most depressed in the whole country.
It obtained a certain amount of relief from the de-rating provisions in the Local Government Act, 1929. Now, when it is just at the very lowest pitch of its fortunes, is the time that the Government chooses to come along and put a new burden upon it which is bound, of course, to increase the depression and still further to extend unemployment.
Look at another case. It is provided that all land owned by certain statutory companies is to be exempted from this taxation. The railways not only own their lines and stations, but have great workshops in which they build wagons and engines, and they are competitors of private concerns which are also building the same things. They have hotels which again compete with hotels owned by nonstatutory companies, and they even let off parts of their property for the purpose of shops. In every single case the statutory company is to be exempt, but the competitor is to be taxed. How are you going to justify a distinction of that kind? The whole of the Bill shows from beginning to end that it has never been thought out. Anomaly after anomaly will either have to be struck out in Committee or else it will still further excite the opposition and hostility which I see in front of it throughout the country.
5.0 p.m.
If I leave the question of industrial establishments and come to organisations concerned with the education, the health, and the recreation of the people, I find the gravest and most serious anxiety among the people who are responsible for those institutions. Under the exemption Clause you find that churchyards and burial grounds, and even disused burial grounds, are to be exempted from the tax. Educational colleges, endowed schools, charitable trusts, hospitals—all these bodies are to be harassed and crippled by fresh taxes put upon their incomes just at the time when every one of them is finding its resources altogether unequal to its needs. I am sure the right hon. Gentleman must be ashamed of a proposal which spares the dead, but seeks to strike at the living. The expansion of the beneficent activities of charitable trusts and of educational establishments really depends upon the increment in the value of land. They build their new extensions out of the proceeds of building leases which fall in,
or out of property which has appreciated in value and which they are able to realise on the market. At the present time they know that all their values would be depreciated. They do not know by how much, and they are filled with anxiety; and I venture to say that as knowledge of what this Bill means to them spreads, protests will come in on the right hon. Gentleman with increasing numbers and increasing force.
What is going to happen to endowed schools I hardly know. Many will, I am afraid, have to be closed altogether. Take Oxford and Cambridge, where more than half the students are in receipt of assistance to get education which is given, even so, at less than cost owing to endowments of this kind. In the future, if they are to suffer new taxation, one of two things must happen; either fees must be raised, or they will have to come back to the Government for increased assistance, and the revenue which is expected to be obtained from this tax will be swallowed up in repairing the damage which it has caused.
Take again the position of allotments. When my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) ventured to ask a question about the position of allotments under this Bill the Chancellor snapped out to him that the majority belonged to local authorities. I regret that the Chancellor of the Exchequer did not look at the figures before making a statement of that kind. As a matter of fact, I find from a report of the Minister of Agriculture for 1929 that the number of allotments held by local authorities was 463,291, whereas the number in private hands was 506,776, while the acreage in the hands of the local authorities was 62,000 odd, and in private hands 81,500, so that, as a matter of fact, more than 50 per cent. of the allotments in this country are going to fall under the taxation of this Bill. I can leave it to the House to judge whether allotments are likely to flourish and increase under that system.
Precisely the same consideration applies to the playing fields. We are told that playing fields, where permanently dedicated to the public, are going to be excluded from taxation. Well and good. Anyone who knows anything about the circumstances of playing fields around the
big towns knows that in the vast majority of cases these will not be permanently dedicated to the public. They are fields used occasionally for other purposes which are let off by farmers and others to small clubs and recreation associations of different kinds, and, if they are to be taxed in future, I foresee that the whole movement in favour of playing fields, which has had such universal sympathy, will be harmed.
I will not detain the House by giving further examples of the folly and injustice of the proposals in this Bill. As our discussions go on it becomes more and more apparent that the real object of the right hon. Gentleman and hon. Gentlemen opposite is the nationalisation of the land by confiscation. The only thing is that they have not the courage to say so. Why is it that we have not heard about nationalisation of the land at the many recent by-elections? Why is it never mentioned in the innumerable letters which the Prime Minister writes to his supporters in the constituency? I almost see the perspiration pouring off Members in their vain efforts to stir up an agitation in the country about the House of Lords. [Interruption.] Let them get to business. Let them tell the truth to the country. Let them say what they are doing in this Bill, and why? Let them say: "We are spending more of the nation's money than we are receiving. Never mind, we are borrowing the difference, so that your children will pay instead of you." Let them say: "We are going to help to pay for our extravagance by squeezing a few professional men who have not many votes and cannot defend themselves, but we are going religiously to preserve from taxation all those upon whose votes we ourselves depend." [Interruption.] Let them say they are going to rob landlords on the ground that they are all Dukes and therefore allied to the Devil, that they are going to injure hospitals, schools, charitable trusts, allotments and playing fields. Let them say: "We are doing nothing to help industry, but much to increase unemployment." Let them finish by saying: "When we have done all the mischief we can to the country you can show us your gratitude by putting us into a tax-free graveyard."

Mr. CLEMENT DAVIES rose—

Mr. STANLEY BALDWIN: May I ask —[Interruption.] This is a most amazing procedure.

Mr. McKINLAY: On a point of Order. Is it strictly within the Rules of the House, Mr. Deputy-Speaker, when you have called upon an hon. Member below the Gangway, that the right hon. Gentleman should be allowed to rise and speak?

Mr. DEPUTY-SPEAKER (Sir Robert Young): I understood that he was rising to put a question.

Mr. BALDWIN: I rise to ask a question. [Interruption.]

Mr. McKINLAY: My point of Order is this. I have been led to believe that the Rules apply to all Members of the House without any distinction of person. Is it in order for the right hon. Gentleman to rise to ask a question if another hon. Gentleman has been called upon by you?

Mr. DEPUTY-SPEAKER: I called upon the hon. Member below the Gangway, and then the right hon. Gentleman the Leader of the Opposition rose and the hon. Gentleman sat down.

Mr. BALDWIN: I rise to ask the Government if we are going to have any speech this afternoon from the Front Bench.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham): I propose to follow my hon. Friend who has now been called upon.

Mr. DAVIES: May I begin by expressing regret at the absence of the author of this Bill, and, still more, deeply deploring the cause of his absence. We have all learned to admire the wonderful fortitude he has shown through this long and trying illness, and we looked with amazement at the iron will which would not allow that illness to prevent him coming to the House and putting forward the measures contained in the Government's programme. We know him as a vigilant, tenacious, and indomitable fighter, and we think with regret of the cause which prevents him from being with us this afternoon. In the first place, I should like to congratulate the Government upon the opportunity that has been presented to them of once again tackling this question of land values and assessment of site
values. I should like to felicitate them upon the will they have shown in taking advantage of the opportunity offered. For upwards of 40 years we Liberals have had this matter in the forefront of our programme.
I recall that when a Conservative Government had a majority of, I think, 134 over others, on two occasions, in 1904 and 1905, two Measures not very unlike this Measure were introduced into this House by two private Liberal Members. One, I think, was Dr. Macnamara, and the other, then a Liberal Member, is now the right hon. Gentleman the Member for Central Newcastle (Sir C. Trevelyan), ex-President of the Board of Education. Apparently, however, he is still a Liberal, inasmuch as he exercises that inherent birthright of all Liberals, the claim that he is entitled every now and again to quarrel with his leader and criticise him. But those Bills were introduced in separate years in a Conservative House of Commons, and they received majorities in 1904 of 67 and an increasing majority in 1905 of 90. Two abortive attempts were made in two previous years, in 1902 and 1903, but were defeated. It takes a long time for right hon. Members and hon. Members above the Gangway to see the logic, reason, and necessity for a reform. Having mentioned to the House that after four years they did see the value of taxing sites and assessing the values throughout the land, it is conceivable that they may come in time, again, to see the value of this Bill. When they do I shall not be surprised if they quote the instances of what happened in the Parliament of 1906 and claim that they initiated the whole scheme for the taxation of land values.
The House will also remember that in 1909 and 1910 the principle underlying this Bill was the principle which underlay the Bill which was introduced by my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) when Chancellor of the Exchequer. We remember, after days of debate, 72 altogether, and a strenuous fight in the country, the Bill was thrown out in another place, but at least a principle was accepted by the country and the House, and finally it became an Act of Parliament in 1910. Then, before the Act had time to operate
properly, what happened? The valuation was incomplete in 1914. I understand only about 79 per cent. of the land in this country had been valued by that time. The result was that a tax could not be properly levied. Taxation and valuation went on together and war intervened, until in 1920 the tax was repealed and the taxes which had been paid were remitted. At the same time, while the taxes were remitted, the valuation was retained by the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain), who was then Chancellor of the Exchequer, because of the admitted value to other Government Departments of the machinery of the Valuation Department. That was retained until 1923, when even the machinery of the valuation was scrapped and done away with by the Conservative majority in this House, in breach of an honourable understanding arrived at in 1920 that the valuation should be remedied. It was a breach committed under the subterfuge of pretending to leave the matter to the whole House, and not to introduce it as a Government Measure. That is the short history, from 1900 to 1923, of the efforts made to deal with the problem of the taxation of site values and the assessment of all the land, and the record of all the units of land in this country.
As far as the Labour party are concerned, ever since it was formed into a body, the principle underlying this Bill has been one of the measures which they have all along suggested should be introduced by them at the earliest possible moment. I can, therefore, understand that to most of the Members on this side of the Gangway and to all the Members on the other side, this Bill is welcome. I, too, welcome it. At the same time, I should like to express my disappointment because of some of the omissions from the Bill and the defects which appear in it. There have been statements that there is some pact, understanding or agreement with right hon. Gentlemen sitting on that bench. I know nothing of any arrangement having been made, but if an arrangement had to be made, I feel that it would not be unacceptable to me if they had all the pomp and circumstance of office, and left the drafting of Measures which they introduce to
Members who sit on this side of the House. I believe that they would be more radical, more logical and would appeal more strongly, not only to the country, but to many of their supporters sitting behind them.
My main objection to this Bill with regard to the taxation of land values is upon the question of valuation. The valuation, I agree, should be simple and direct, but it should be complete. The definition which is to guide the valuers when they have to undertake the valuation under the Act should be absolutely clear. I realise that in the Act which was passed in 1910 the definitions were much too elaborate and complicated. Not only had the valuer to ascertain the values for Mineral Eights Duty and for Reversion Duty, but also he had to ascertain the value of every site in four categories—gross value, total value, gross site value, and assessable value. Innumerable questions had to be answered by the owner and innumerable matters had to be settled by the valuers, and the result was a much too complicated system.
Clause 8 of the Bill is commendably short and clear. The valuer has only to ascertain two values, namely, the site value and the cultivation value. My objection is not to the want of clarity or of simplicity in the Clause, but to the fact that it is incomplete. Under Subsection (6) of Clause 8 there is an instruction to the valuers that if there is no tax payable, if the land is exempt from taxation, then the land shall not be valued, but they shall only value it after it has become chargeable and as to the date when it so becomes chargeable. The effect will be that large areas and innumerable units will not be valued, and the record of the land will be hopelessly deficient and incomplete. This will not be, as was the case in the Act of 1910, a complete Doomsday Book, but a more expurgated edition. There will be no record of the land units exempted from taxation under Sub-section (1) of Clause 19.
There are in that Clause eight classes of land which are exempted from taxation, although each one of those units may have to be valued unless they happen to be under a lease the term of which was over 50 years originally, and the term is still running. What will be the extent of that land, I do not know. All
the land units under Sub-section (3) of Clause 20, which exempts from the tax persons whose total capital value of land is only £120, are also exempted from valuation. [Interruption.] It may be that the right hon. Gentleman is right. That is how I read it. I shall be glad to be corrected by the learned Solicitor-General later on, if it turns out that I am wrong. Reading Sub-section (6) of Clause 8, in conjunction with all those other Clauses, I think that it is clear that where there is no tax there is no valuation. I realise that a question was put by the right hon. Gentleman to the Solicitor-General when we were discussing this matter in Committee, and I think that he will find that the answer of the Solicitor-General was not quite satisfactory.
The most important of all those exemptions is that in Sub-section (2) of Clause 14. If the cultivation value of agricultural land is either equal to or exceeds the land or site valuation, then no tax is chargeable and the land is exempt from tax, and, as I read it, is not to be valued. I regard that as a very grave defect in the Bill and one which, I hope, will be remedied in Committee. The Chancellor in his speech on the Money Resolution said that in preparing this scheme he had experienced a conflict between theory and practicability, but that he had done his best to adhere to logic. I am sorry to say that I feel that on this occasion he has given away too soon, and has not followed that usual logic and hard reasoning which we are accustomed to expect from him. In an earlier part of his speech he had expressed the hope that this Bill would be followed by, and would be the complete basis of, a complete reform in rating and of transference of local rates from houses and improvements to site values. In the second place, he hoped that it would be a method for ascertaining the price of land required for public purposes by public authorities, and, further, he commended the Bill because of the fact that it would provide a record of changes in ownership and changes in the value of land. But this Bill, as it is framed now, will not do one of these things. It is not complete enough to enable any one of these things to be accomplished.
I sincerely hope that the Bill will be followed by another Bill which will bring about a complete revision and reformation in our hopelessly inadequate rating system. It is long overdue. Local councils have called for it time and time again. To think that at this time we should be rated upon the improvements which we carry out, when we are conferring a benefit by putting in those improvements, is something which passes the comprehension of the ordinary man, and it is high time that such a Measure was introduced. When such a Measure is introduced, it should be based upon the true site value, and the site value of all land will then have to be ascertained. Why not do it now in one general valuation? A valuation such as this, which is only a valuation of one-fifth of our land, cannot form an adequate basis for the reform of the rating system.
The only answer which I have heard with regard to this, is an answer which was given by the learned Solicitor-General, who said that it would cost too much. What will it cost? What will be the extra cost of valuing every unit at the present moment? You cannot expect a valuer to decide in his office by merely looking at a plan that a portion of land is exempt and therefore need not be valued. He has to visit the land and make inquiries with regard to it, and, having made those inquiries, he will make, at any rate, a mental valuation. The only difference between that and a complete valuation is, that the mental valuation is not regarded as the full valuation. As far as I can see, the only difference in cost will be the cost of actually recording the figures at which he has arrived in his own mind. It is no good saying that you must know instinctively that there are certain lands which will not have to be valued. How is anyone to tell? Hon. Members know—and it certainly is so in my part of the country, and also in parts of Scotland—that land has acquired, owing either to action on the part of public authorities or on the part of a railway authority, a value over and above the cultivation value, and how is one to judge by merely sitting in an office whether such land is liable for taxation or is to be exempt from taxation, or whether it is to be valued or not?
The value of agricultural land changes daily. You may get to-day a portion of land which has only an agricultural or cultivation value, but in six months time it may have an entirely different value. Under this Bill, as long as at the actual date of valuation the cultivation value exceeds the agricultural value, it will not be valued, and it will not be valued until somebody points out that between the date when this Bill comes into operation and some other date it has acquired a new additional value which calls for taxation. That is a matter which ought to be remedied by the House when the Bill gets into Committee. I agree also with the learned Solicitor-General that the Acquisition of Land Act, 1919, has proved entirely inadequate to meet the case of the public authorities in acquiring land at fair prices. I think that he and I, with the exception of the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon), have had as long an experience as anybody in the exorbitant prices which are demanded from public authorities and which, do as you will, are awarded by the arbitrator who is appointed to decide the case. The Acquisition of Land Act really only abolished one thing. It abolished 10 per cent. of the Land Clauses Act, and practically nothing else. I remember cases in which the learned Solicitor-General and I have been engaged, and I think that I might state this one figure. I will not say on which side we were, but recently a small derelict undertaking, which had cost, in 1911, £6,000, was acquired by a public undertaking for a public improvement. I think that the price which was asked of that public authority was in the neighbourhood of £80,000 or £90,000. There had been a steady loss on this undertaking from 1919 to 1928 or 1929, since when it had not worked. If I remember aright, the figure of £22,500 was the price that had to be paid for that derelict undertaking. What is the use of citing the Acquisition of Land Act in a case of that kind? It is inadequate. If this Bill is to form the basis of a new Bill which is to be introduced which will enable public authorities to acquire land at a fair price, it ought to be logical and complete now and the valuation ought to cover every class of unit, so that we may
know exactly where we are from the time that the valuation is complete.
There is a third reason, and that is that the complete valuation is of immeasurable benefit to the public authorities. It was admitted and put in the forefront of his argument by the right hon. Member for West Birmingham when he was Chancellor of the Exchequer and he was appealing to the House not to get rid of the valuation and the Valuation Department, that the Valuation Department had saved thousands and thousands of pounds of taxes to this country in the collection of Death Duties. We know that ever since the Valuation Department has been in existence the valuations that have been put in by the representatives of the estates have been nearer to the truth than they were before the establishment of the Valuation Department. These are three reasons why I think that this Bill is defective in its valuation Clauses.
May I turn to another matter, and that is that there is no reference in the Bill, as was pointed out by the right hon. Member for Edgbaston (Mr. Chamberlain), to Increment Value Duty. The most valuable increment and the one that returned the greatest amount to the Treasury in the Act of 1909–10 was the Increment Value Duty, but that was not allowed to operate. In 1914 practically the valuation stopped and the collection: of the taxes stopped. In 1920 the taxes were remitted, and they were remitted just before the boom period in development, especially the public development which followed the War when new roads were being made, houses were being built and other developments that had been delayed during the War were being extended right and left. What would have been the return to the Treasury in the year 1931 if that Act had been allowed to remain and that increment value had been collected from 1920 down to the present day? Curiously enough, there is no reference in the Bill to Increment Value Duty, although every instance that was given by the Chancellor of the Exchequer in his speech on the Money Resolution, which preceded this Bill, was an instance in favour of Increment Value Duty. There was no reference whatever to the lack of development or under-development and no reference to site value. They were all references to a comparison between the unearned increment which had gone into
the pocket of somebody who had done nothing for it, the increment which had been added to him by the public expenditure of money and the work that had been done by others than himself.
I could add to the figures that were given by the Chancellor of the Exchequer, but I do not want to weary the House by entering into figures. I will give only one figure, and that is from the triennial report which, I think, was issued by the chairman of the Middlesex County Council, in which he pointed out that about 70,000 new miles had been added to the roads of Middlesex since about 1920, which meant that the frontager had had an increased value along those roads of £1,800,000. Not only had the value been increased for the frontager, but the lands that were now being served by those roads had gone up in value by an estimated sum of £13,000,000, so that the Middlesex County Council had made a present to the owners of the land near those roads of roughly £15,000,000, at a cost to the Middlesex County Council of £6,000,000. That is an instance where I should have thought that Increment Value Duty would have brought in a sum which would have been extremely helpful to the Chancellor of the Exchequer this year and in future years, but there is no reference to it in the Bill.
How is it that the Chancellor of the Exchequer has left out this tax which has proved in the past capable of producing such a large sum of money, and which in the future would produce even a larger sum? The extraordinary thing is that in regard to that duty there seems to be almost a unanimous opinion in its favour. I have heard very little criticism from above the Gangway on this side of the House against Increment Value Duty. As has been pointed out, the fact that under the Town and Country Planning Bill the whole of the increment can be taken by the local authority, and the fact that that has gone through with very little opposition, is evidence of the fact that Increment Value Duty would be acceptable to the majority of this House. I realise, of course, that to the true believers, the only orthodox upholders of the faith, like the right hon. and gallant Member for New-castle-under-Lyme (Colonel Wedgwood)
and the hon. Member for Burslem (Mr. MacLaren) this is an excrescence upon the true faith which ought not to have been allowed, but, apart from them, I think there is a unanimous opinion that this tax is both fair and equitable.
With regard to the tax itself, I should like to say a few words. Frankly, it is undoubtedly an extra tax and an additional burden upon certain taxpayers. It will continue as a burden additional to every burden until the right hon. and gallant Member for Newcastle-under-Lyme and the hon. Member for Burslem form a Government of their own, when all the other burdens will disappear and will be buried in some mysterious way into the land and we shall have only one tax. Until that time comes, this tax will be an additional burden over and above all the other burdens of taxation that have to be borne. There is only one justification for this additional tax and that is that it is based on the value of the site which has been created by enterprises other than the enterprise of the owner. These enterprises are usually local and not national. The Chancellor of the Exchequer said that this tax will in future relieve the burden of local taxation. I hope that it will be so used and so earmarked so that if it is not used directly to assist local taxation, at any rate it will be earmarked against the £35,000,000 which the Treasury now have to find annually in order to help local taxation because of the effect of the De-Rating Act, and that it will continue to be so used until that folly is removed from the Statute Book.
With regard to matters of detail, I do not propose to trouble the House at the present time, except to make the observation that it seems to me that the whole speech of the right hon. Member for Edgbaston was confined to matters of detail. He did not seem to me to advance one really fundamental objection to the general principle of the Bill. He dealt with the exemption of hospitals and playing grounds; very important matters which will be discussed fully in Committee. He also dealt with the question whether improvements should be included or not included in the site value. Speaking for myself, I hope that the value will be that of the clear site freed of all improvements which have been put in by the owner. That is the true and real
principle underlying the taxation of site values. These are matters that will have to be discussed in Committee.
There is one further point to which I should like to allude and that is Clause 15, which tries to provide, and does provide, a method of apportionment of the incidence of the tax as between the lessee and the owner. In that Clause there is an arbitrary rule laid down. I hope that that will be revised in Committee. The Solicitor-General, in his reply in Committee, suggested a much fairer way of apportionment, and I am certain that such can be arrived at. I should have thought that the simple one was to take the value of the site as the value of the lease and the value of the freehold and the proper proportion that the lessee and the freeholder should pay, without laying down any arbitrary rule of any kind. These are matters which will have to be discussed very fully at a later stage, but they can only be discussed by the House giving, as I hope it will give, a Second Beading to the Bill.

Mr. W. GRAHAM: The right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) and other speakers at other stages of our proceedings have complained of the time allotted to the Bill. I do not think that that need detain us this afternoon, because in recent years one day has been frequently allotted to the Second Heading of the Finance Bill. In any case we have had eight days' discussion of the Budget Resolutions, which have covered a very large part of the ground included in this Measure. There is also some complaint that we did not initiate the Debate this afternoon. On inquiry, I find that for the most part in recent years the Government of the day, including our predecessors in office, have been content to make a formal Motion from this side of the House and have awaited the onslaughts of the Opposition, in order to ascertain the case that they had to meet. Statements have been made from this side that there is ample precedent for the course that the Government have taken. None the less, I intervene for not too long a period—speeches will be made by my hon. and learned Friend the Solicitor-General, and, if necessary, also by my hon. Friend the Financial Secretary—to try and deal with several of the
broad points which have been raised by the right hon. Member for Edgbaston.
If we look at the Amendment, it may, without lack of respect, be described as a mixed grill. There is an appeal to various sections of taxpayers. Throughout the speech of the right hon. Gentleman there were three points, the first directed to the interest of certain taxpayers who, he thought, are unjustly treated by the proposals of the Bill; the second directed to the Land Values Tax and the third dealing with the financial structure of the Budget, particularly the point relating to the contribution in respect of unemployment insurance. I will try to deal with these points. It is a perfectly fair and reasonable observation to recall that we are dealing with circumstances of acute industrial distress, that in 1930 great sections of our industry and commerce sank to a very low point, and we have taken the view that the Chancellor of the Exchequer is on sound lines when he endeavours at the present time to make the minimum of alteration in our taxation.
We have had to provide for a deficiency of £37,000,000, and we have covered that to the extent of £20,000,000 from the American Exchange Account, to £7,000,000 from an increase in the Duty on oil and to the extent of £10,000,000 in the acceleration of the payment of Income Tax under certain Schedules. Not a single word has been said about the £20,000,000 from the American Exchange Account or about the £7,000,000 from the additional Duty on oil. That silence on the part of the Opposition is entirely satisfactory to the Government. The right hon. Member for Edgbaston has concentrated on the position of certain sections of Income Tax payers, and has begged me in moving terms to see whether any kind of concession can be made. Before I reply to that, what are the facts of the situation? I am afraid that I must repeat certain points which have already been put to the House. From 1869 to 1915 this taxation was collected in one instalment, but from 1915 very largely because of War circumstances, certain changes were introduced by way of concession, and again in 1918 so that in the case of certain classes of taxpayers, the tax was collected one-half on the 1st of January and the other half on the 1st of July of each year. That continued, and there is
not the least doubt that it would have continued but for the serious circumstances which have lately overtaken the country.
In any event, the right hon. Member for Epping (Mr. Churchill) made an inroad in that situation in 1927, when he accelerated the collection of Schedule A property tax, taking the whole of it on the 1st of January each year. The right hon. Member for Edgbaston, in his indignation this afternoon, tried to draw the distinction which he drew in previous speeches in criticism of this plan. He suggested on a former occasion that we were not dealing necessarily with the same class of people but with a larger class, not so strong financially, and that this acceleration to the extent of one quarter, because that is all that is involved, will fall with greater hardship on these people than the plan adopted in 1927.
That criticism overlooks certain important considerations to which I have previously alluded, the great building society enterprises in this country and the large extent to which house ownership has developed, and the fact that that acceleration in 1927 bore upon many people whose circumstances were presumably not much different from those people who are affected now. But, in any case, the concession was given in rather happier financial circumstances than those which exist at the present day. The whole of that concession is not taken away, only one half of it. Hon. Members opposite constantly fall into error in analysing problems of this kind because they tend to look to the sums collectible as being at the standard rate of tax, whereas the thing that really counts is the effective rate, and that effective rate has been profoundly modified in recent times more particularly since the Royal Commission on Income Tax in 1919 made its report. It is literally correct to say that EUS compared with 1915 a single man enjoying an income of £500 per year is liable for less tax than he was at that earlier date; a married man up to £800 a year will be liable for less tax, and, speaking from recollection and carrying the matter into rather higher ranges of income, a married man with three children up to £1,400 or £1,500
a year is liable for less tax than the amount for which he was liable in 1915.
When we review the years of depression which have intervened and the peculiar and distressing burdens which have settled upon the country can it be seriously suggested that there is any real hardship in withdrawing to the extent of one half a concession which has been given all this time. What are the alternatives suggested by hon. Members opposite? We have constantly asked them to tell us what they propose if they are not in favour of the admittedly emergency plan of the Budget. Only two suggestions have been offered. One is a tax upon sugar, an increase in indirect taxation on an important article of food which enters into innumerable industrial processes in this country. That is not a plan which this Government can adopt. They also suggest a form of emergency tariff, or a tariff of some kind. That is not a plan which commends itself to the Government or to hon. Members on the Liberal benches. A wide extension of indirect taxation is a plan which always takes more out of the pockets of the taxpayers than in reality reaches the Exchequer. If that is the extent of the contribution of hon. Members opposite the Government, I think, on very strong ground, and, in any event, surely a plan of this kind is preferable in existing conditions to an increase in the standard rate of tax, because that is the only alternative if we are going to keep it on a purely Income Tax basis.
I want to pass to the next point in the right hon. Gentleman's criticism. He says, in effect, that there is a hole in this Budget, and he quoted the form of certificate which is given in these days by an auditor of a public company or other concerns. Far be it from me to cast my aspersions on these certificates, but there has been a good deal of criticism lately, and I should have preferred to have taken some other illustration. But in any case, let me say something on the general principle, because during the later stages of our Budget Debates we shall be able to give any additional information which hon. Members may quite properly require. This does involve some notice of the recent history of unemployment insurance in this country, because the burden of the right hon. Gentleman's case is that this pro-
vision, more particularly for transitional benefit, is insufficient, and that we have knowledge of its insufficiency and, therefore, that the Budget is not the whole of the story and that something different should have been presented to the House of Commons. The right hon. Gentleman has a charming way of forgetting the history of his own administration. After all, with all our faults, and I do not deny them, we succeeded to a very difficult heritage in this matter. The right hon. Gentleman and his party were in power for five years between 1924 and 1929, and they had complete allegiance in another place and a vast majority in this House.
During all that time the unemployed total in this country was practically stationary round about 1,000,000 people, and the debt in the fund increased from rather more than £4,000,000, where we left it in 1924, to about £37,000,000 in 1929. During all that time they did not repay the debt. They introduced certain alterations, but to the best of my recollection they never related the debt in the fund, or the borrowing of the fund to the Budget of the year, and they never said that their Budgets were dishonest. It is only now, when the Labour Government is in office, that they propose this consideration. We could establish a case from history, but there is, of course, a very powerful reply in the literally appalling circumstances of the past year or 18 months. During that time the numbers have grown to 2,600,000. The Government have made certain contributions to what I may call the ordinary or normal part of the Insurance Fund, that is, they increased the Exchequer contribution until it was equal to one-half of the combined contribution of employers and employed, and that involved an additional charge on the Exchequer of between £3,000,000 and £4,000,000. During that time, and this is really the question before us, the transitional benefit has increased very largely, and been paid out of revenue. In 1929 my right hon. Friend provided £4,000,000. This grew to £22,000,000 in 1930, and the provision which is included in this year's Budget is of the order of £30,000,000.
6.0. p.m.
The right hon. Gentleman demands in powerful terms across the Floor of the House information as to what we intend to do with this great problem in our midst. A Royal Commission is sitting on
the whole question of unemployment insurance, and no one knows what that Commission will report. [An HON. MEMBER: "The 'Daily Herald.' "] There may be forecasts, but there is no official statement as to the proposals of the Royal Commission. All kinds of plans might be made for dealing with this subject. A certain part of the criticism of hon. Members opposite has proceeded on the assumption that the debt of this fund is not to be met; that it is to become an Exchequer charge. Of course, if we should ever recognise in this House that the fund is unequal to meet its debts it would pass automatically as a burden to the Exchequer, but that situation is not before us at the present time. Hon. Members are perfectly familiar with the various proposals made, and I am making no comment upon them, but, after all, plans have been outlined quite publicly for making an annual provision relating to contributions, or a certain part of them, which over a term of years would get rid of the debt, but any plan of that kind must be related to a scheme which places the ordinary administration of the fund upon a sound actuarial basis, because quite clearly nothing would be gained if you were getting rid of debt along the lines which have been publicly suggested, and at the same time you were accumulating debt in the fund by failing to bring the contributions into strict relation with the outgoing from time to time.
The Chancellor of the Exchequer was perfectly frank on the matter towards the end of his Budget speech. He said that if there are gaps in the Budget they must be met by economies to be effected—that is still his view—within the financial year. In addition to the Royal Commission on Unemployment Insurance there is the Economy Committee which was set up by a virtually unanimous resolution of this Chamber. I am perfectly candid when I say that I am not in a position to anticipate the recommendations of that Committee, any more than I can say a single word about the recommendations of the Royal Commission on Unemployment Insurance. But I repeat that that is the Chancellor's view, and it is the Government's view. I hope that within the time to which the Bill relates, some ordinary improvement in our industrial situation will make matters work out
rather better than, frankly, they would appear to be in our analysis this afternoon. In the third place the right hon. Gentleman proceeded to an analysis of some of the features of the taxation of land values included in this Bill. My hon. and learned Friend the Solicitor-General will deal later with certain questions which have been raised which touch legal and kindred problems.

Sir AUSTEN CHAMBERLAIN: I trust that the reply of the Government to the important questions put from this side of the House is not on this occasion to be reserved until we have no opportunity of making an answer. Surely the House is entitled to have that information while the discussion is proceeding, and not have it reserved, as it was on the Resolution, until it is too late to make any reply.

Mr. GRAHAM: The right hon. Gentleman may accept a complete assurance on that point. My hon. Friend proposes to speak at a very early stage. The right hon. Gentleman has made a perfectly fair case on which all our discussion must proceed if intelligent debate is to be held. I propose to deal with some very broad cases which the right hon. Gentleman raised. We all remember the experience of the legislation of 1909–1910. The Government set out with the express desire of trying to get as simple a plan as possible in what is undeniably a very complicated problem. No one disputes that there are all kinds of rights, a wide variety of ownership and every kind of burden attached to the land system in this country. I am not so familiar with the English problem, but if it were in order I could entertain the House for a very long time on the points as to the superior or the actual owner in Scotland, the person who feus the land, the owners of the houses and other matters, but I should hesitate to say where the actual ownership lies very often. There are all kinds of circumstances and conditions relating to the interests in the land affected.
We are setting out with the express purpose of trying to avoid the complexities of 1909–1910, and of having the land valued with the roads included, on what I call an intelligible and understandable basis, providing a unit of
valuation which can be compared with other pieces of land, and to which a value can be attached. No one disputes the difficulties which are involved. Of course these difficulties were included in certain of the anomalies, one or two of them real and others imaginary, to which the right hon. Gentleman directed attention. Let me take one illustration with which I happen to be familiar as the kind of difficulty which the House must discuss in detail during the Committee stage. The right hon. Gentleman directed attention to the exemption which is accorded to a railway undertaking, to land which is owned by a great statutory body of that kind, and the land which is owned by some form of transport in competition with the railway.

Mr. CHAMBERLAIN: Not necessarily transport.

Mr. GRAHAM: It might be workshops or hotels. No doubt on the surface there is a great deal to be said for a criticism of that kind. But let us observe the very difficult position which arises the moment we go below the surface in this matter of railway undertakings. I am not speaking by way of excluding any constructive Amendments which can be promoted in any part of the House to strengthen this scheme. Such Amendments will be very sympathetically considered. The whole outlook of the railways in this country was altered in 1921. Then you had more than 100 railway companies abolished, and you had them replaced by four great amalgamations or trusts. Under that legislation there was set up a rate tribunal with a direction so to fix the rates and the charges, together with allowances for certain classes of capital expenditure, as to give the standard revenue of 1913. It is quite true that owing to years of industrial depression that standard revenue has not been attained. But under that Act of Parliament you are not dealing with a concern which is in ordinary competition, so to speak, but with what is a grant regulated undertaking instead.
Again, there are certain companies which are in competition with outside transport concerns, but when we make inquiries the whole of their shares are held by the railway amalgamations as subsidiary undertakings or as outside investments by these railway companies.
Under the Bill undertakings of that kind not tied up to the statutory body would admittedly be included, but, of course, the hotels are excluded at the present time because of the manifest difficulty of disentangling them from the ordinary operations of the railway amalgamation. I am not going to burke these difficulties. No one would stand here and say that there are not difficulties of that kind. I want very frankly and candidly to face them, and we shall have to argue them in great detail during the Committee stage. But by and large the object was to try to get a valuation, particularly of those portions of land, other than agricultural land, which was to yield a revenue, and to do that on the basis of a simple and direct valuation, which can be ascertained, and not proceeding on the basis of elimination which was characteristic of the 1909–1910 legislation.
That is the plan which the Government have attempted in this Bill. A very great deal of detail will have to be covered during the Committee stage. But the present plan is quite without prejudice to that wider and complete valuation of the land of the country which, we entirely agree, is necessary and desirable if we are to know exactly how we stand in the matter. The right hon. Gentleman made great play of the hardship which he alleges will fall on certain classes of people. I can imagine him taking this line of hardship, but a very large proportion of people whose circumstances might be described as hard, spinsters and others, living in small properties, would be quite covered by the fact that up to an annual yield of 10s., giving a capital value of £120, they will be outside the scope of the proposal. No one has any desire to penalise thrift. All hon. Members on the Government side have been closely' connected for years with thrift organisations, and we do not forget that nearly £2,000,000,000 in money in this country belongs in the aggregate to an enormous number of people of very small individual resources. We are not forgetful of a consideration of that kind. So I refuse to be moved by the plea that the right hon. Gentleman makes, that this scheme is going to penalise a great body of very small or comparatively poor people. I have spoken at some length and it would be unfair longer to detain
the House, because the Solicitor-General and the Financial Secretary to the Treasury will intervene later in the Debate.

Sir A. CHAMBERLAIN: Is not the right hon. Gentleman going to say something about education and charitable institutions?

Mr. GRAHAM: I want to speak about the relationship of the Budget to our general trade. I indicated earlier that the whole Budget had been designed to have strict regard for a time of very severe depression. Broadly speaking, what is our industry attempting within the limits of the existing industrial order, in present conditions? All the criticism of a great majority of, or practically all, the trade missions of recent times is that we are being defeated in important markets in different parts of the world, and very largely on price. Our prices today are not competitive. It is agreed that very drastic reorganisation is necessary over a large part of our industrial system if the costs of output are to be reduced on sound lines, and if, as I hope, that is to be done without further attack on the wages level. That reorganisation can be undertaken, and it should be encouraged. I suggest that in a time of unparalleled or very great financial emergency this Budget makes the minimum of change. I think it is a valuable contribution to that reorganisation. It so far maintains existing conditions that no real hardship is imposed on any section of the community. Accordingly at this stage I have no hesitation in offering a general defence of its proposals.

Sir JOHN SIMON: For those of us who were Members of the House two-and-twenty years ago, a discussion such as is now beginning on the land Clauses in the Finance Bill, has something of a reminiscent echo of
—"far-off things
And battles long ago.
I was in those days a young Member of the House and a very warm supporter of the then Chancellor of the Exchequer. I thought then, and I still think, that there is a very great deal to be said for the principles of land taxation for which he was chiefly responsible, and whether they were successful or unsuccessful, whether they produced a great deal of money or whether they did not, they were an attempt to express a view of
the relation of the State to private property in land which I thought, and think, perfectly just. I know that the present Chancellor of the Exchequer greatly deprecates any reference to the land taxes of 1909–1910 for the purpose of testing his present proposals, and I agree that there is a very striking contrast between them. Therefore, I was a little surprised just now when my hon. and learned Friend the Member for Montgomeryshire (Mr. C. Davies), in his very attractive speech, began by saying that the principle of the land taxes included in the present Finance Bill, was the same as that in the Budget of 22 years ago. I could not help being reminded of another Welshman who said:
There is a river in Macedon; and there is also moreover a river at Monmouth …. and there is salmons in both.
There was a Finance Bill in 1909, and there is a Finance Bill now, and there are land taxes in both, but I think I can show to the House that the contrast between the two systems is very considerable indeed. Though we might have suspected this in the Budget Speech, and in the statements made from the Treasury Bench during the discussion of the Budget Resolutions, it was not, of course, possible to know it for certain and in detail, until one had the present Finance Bill before one. Indeed, my right hon. Friend the Leader of the Liberal party assured the House that we all, himself included, had no previous knowledge of the contents of this Bill. Therefore, I conceive that Liberals in this House are now quite uncommitted and unpledged as to the attitude which they take up in regard to the Measure. I propose to offer a small contribution to help them to make up their minds.
I may, perhaps, be allowed with modesty to say that I have some little claim to speak, because in the old days, 22 years ago, I was not only a very faithful follower of the then Chancellor of the Exchequer, but, at a slightly later stage, I was one of his colleagues, and in a small way I shared his burden. His task was to go about the country and make very rousing speeches which created much public enthusiasm for the land taxes. My duty was a much more humble one. It was merely the duty, equally necessary, and I think in some
ways rather more difficult, of explaining to His Majesty's judges what the land taxes meant. I know that the observation has been made that the land taxes 22 years ago did not produce very much for the Exchequer. I should like to assure the Solicitor-General and his colleague that they produced a great many briefs for the Law Officers. That, I hope, will be some consolation to my hon. and learned Friends because, as far as I can see, the two hon. and learned Gentlemen, the Law Officers, are the only occupants of that bench, up to the present, who are marked down for the purpose of carrying out one of the propositions of the Chancellor of the Exchequer in the great economy Debate when he said:
In the general sacrifice, the Members of the Cabinet are prepared to make their substantial contribution."—[OFFICIAL REPORT, 11th February, 1931; col. 449, Vol. 248.]
Let me point out in two or three simple sentences what the two principal taxes were in the Finance Act of 1909–1910—the two which are relevant to this purpose, and, indeed, the two which my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) referred to the other day as the relevant ones. I ask the House to observe how important the contrast is. There was first the Increment Value Duty. That duty came to be paid when landed property changed hands, and when, therefore, money was received by the prospective taxpayer on parting with his land. There was no doubt that, at least, there was a fund out of which the tax could be paid. If, on those occasions, it appeared that the land had exchanged hands at a price which showed that its land value—its value apart from superstructure—had increased, then, subject to one very important provision, the Increment Value Duty secured to the community a portion of that increase. I think it was perfectly just to do so. The exception was that there was no occasion to exact the tax if the reason why there had been an increase in the value was because of the expenditure of the owner or his predecessor. Therefore, it was first of all necessary to subtract what was proved to be expenditure which had increased the value of the land.
As I have said, I took the view and I take the view, that the principle behind that sort of tax is perfectly just. It has
been applied as a matter of fact again and again under the name of betterment of recent years. The House of Commons has, again and again, introduced it in its legislation and, though there may be difficulties in working it out, I submit, in fact, that the principle is one which may fairly be accepted, and the principle is that the community is fairly entitled to ask for some special contribution in a case where landed property changes hands, and it is shown that the increase in value is due to something which the owner has done nothing to bring about. I shall point out in a moment how that seems to differ from the proposals in the present Measure. It is a very striking thing, as my hon. and learned Friend the Member for Montgomeryshire said, that the speech made by the Chancellor of the Exchequer in support of the Budget Resolutions, and, I would add, the speech made by my right hon. Friend the Member for Carnarvon Boroughs in support of it—that those speeches were packed with illustrations of unearned increment. You might have shifted the speech of the Chancellor of the Exchequer on that occasion, straight back to 1909, and used it as an argument for the Increment Value Duty of that year. As I will show, and as the House I am sure realises, the tax which we are now asked to adopt has no relation whatever to that principle.
What was the second tax in the old Liberal Budget? It was probably the only one which some of the classical land taxers would recognise as proper. It was the Undeveloped Land Duty—a duty of one halfpenny in the £ on undeveloped land. Again, I may be allowed to point out, for the purpose of the contrast to which I am coming, what was the sort of land which was subject to the Undeveloped Land Duty. The first and most obvious test was that the land had to be undeveloped, that is to say, there was no duty put upon it if it was covered with buildings or if it was just an ordinary garden round a house. Agricultural land at the other end was also excused, but the land that was the subject, the target, of the Undeveloped Land Duty, was land not yet built upon or developed, which had a value larger than its agricultural value and which according to this view—this theory if you like, was land becoming ripe for development by way of building or the like. Again,
I think, myself, that there is very considerable theoretic justification, and some practical justice too, in trying to devise a workable tax along those lines and for this reason. Although you cannot say of the tax on undeveloped land that you are only asking the taxpayer to pay when he has received the full advantage of his capital increment, still, at the same time, the actual capital value of undeveloped land just outside great towns is, in fact, substantially out of proportion with the mere annual return from it as long as it is being let or used for agricultural purposes. It is a question of devising a proper scheme—and I well understand the criticisms which were offered 20 years ago—but I ask the House to observe, again, how completely different that system is from anything which we are now asked to discuss.
The Undeveloped Land Duty, to sum it up, was a duty which did not apply to land as soon a "the land was built upon. It excluded all value that was due to the expenditure of the owner, and there was a long list of exceptions—I have been refreshing my memory about them to-day—as to which I will say this. I do not believe that there is a single exception which was introduced in the Act of 1909–1910 which, read simply for the purpose of seeing if it was just or fair, could be refused to-day. Those were the characteristics of the land taxes which some of us 20 years ago were concerned in supporting—some of us who are now scattered on different benches of this House—and the reason why the Liberal land taxes did not produce a large income was not, I would ask the House to believe, in the slightest degree because the Chancellor of the Exchequer of that day was bullied and badgered and blackmailed and pressed into making all sorts of unreasonable concessions. Really, I must defend the memory and reputation of the Chancellor of the Exchequer of 1909. He was the last man in the kingdom to give way to mere illegitimate pressure. Nobody who knew anything about my lamented friend would for a moment doubt his courage and resource. And a very grave injustice would be done to him if it were supposed that he was not also a man who, when you placed before him an undeniably just claim for an exemption, would not have the courage and honesty, when he saw it, to grant the
exemption. The real reason why the Liberal land taxes of 20 years ago did not produce much money was not in the least because their author was a gentleman who was driven from pillar to post. He was the spokesman of a great majority which could go roughshod over everybody. It was because, when you came to examine how those taxes worked out in our complicated land system, a whole series of cases which had hardly been thought of presented themselves and something had to be done.
I heard my right hon. Friend a week ago speaking on the subject, and looking back to those days and saying that he was afraid that he had been too meek. Meek! I should have said that meekness was the very last quality which could justly be attributed to the right hon. Gentleman. He deserves, I have no doubt, all sorts of blessings, but not the blessing which is reserved for the meek. Perhaps it is just as well, because, after all, the blessing that is reserved for the meek is that they shall inherit the earth, and there would not be much use in that if God has given the land to the people. To show how memory dwells on these ancient exploits, and how after a time we begin to tell one another things which we believe we did, but which are not quite right, may I just point out that these very exceptions which my right hon. Friend told the Committee the other day had been forced upon him by people in front and by people behind and all the rest of it—the main exceptions—were all in his Budget speech. Those were not the days when Government declarations were prematurely revealed to the Press. Take, for instance, this exception. Should your land tax be a tax which makes quite sure that you do not attempt to put the impost on values which have been made by the contributions of the owner? That was not forced on the Chancellor of the Exchequer in 1910. Let me read a sentence from his Budget speech. He says this:
The growth in the value, move especially of urban sites, is due to no expenditure of capital or thought on the part of the ground owner, but entirely owing to the energy and the enterprise of the community. Where it is not due to that cause, and where it is due to any expenditure by the urban owner himself, full credit ought to be given to him in taxation, and full credit
will be given to him in taxation."—[OFFICIAL REPORT, 29th April, 1909; col. 532, Vol. 4.]
It is exactly the same when you come to Undeveloped Land Duty. The provision which was contained in our Budget, the exception, for example, that you were first to subtract the expenditure which had been incurred in making roads or sewers, was all part of the original scheme; and, looking through it now, I really do not know which of the exceptions in the Statute of 1909–10 to the Undeveloped Land Duty is an exception which the present Government will say is illegitimate and unfair. That, I think, is an accurate account—I have refreshed my memory by reading some of the Debates—of the taxes of 20 years ago.
I turn to the present Bill, because I want to see whether my hon. and learned Friend is right when he thinks that the principle of the present Bill is just the same. If it were, everybody would be free to consider if he is still of the same opinion; but, if the principle is different, we are in the presence of a new issue. When I look at the Land Value Tax in this Finance Bill, the first thing which strikes me about it is that it is an annual tax, not of a halfpenny, but of a penny, on land value, addressed, apart from agricultural land and one or two exceptions, to land whether it is built upon or not. It is no longer the case that you are simply to get a special revenue from the owner of a piece of land, because the land is undeveloped and might be developed. You are seeking by this Bill to get an extra piece of revenue by a special tax from people merely because they are owners of land. I say with complete conviction, and I challenge all contradiction, that that was never the principle of the Liberal Budget of 1909–10. Indeed, Mr. Asquith was very careful to declare—I have the quotation here—that the taxes which were being imposed by that Budget were not taxes on land at all, but that they sought for certain cases in which illegitimate or unmeritorious advantage had been gained by a particular kind of person who owned land, and they asked for a contribution.
The first point to which I ask the attention of the House—whether it is right or wrong is another matter—is the fact that really the proposal that
is contained in this Finance Bill is of a perfectly different character. It is a proposal to put a tax upon the land value—site value mostly—without any regard as to whether or not the land is being used for its best purpose or not, or whether it is being developed or not, or anything of that kind. Of course, that is quite logical according to some people, but it is a perfectly different system from anything that has hitherto been proposed in this House. The second difference is this. We, 20 years ago, thought that it was proper to impose the tax in cases where there had been an increase in value, and with reference to the increase. Nothing of the sort is to be found in this Bill at all. Speeches that were made on the Budget Resolution were full of horrifying instances of great and undeserved increase, and I am prepared to join in any practical plan for getting a contribution from that. But that has nothing in the world to do with this Bill. Under this Bill, if a man spent £2,000 in buying a plot of land, and if to-day his speculation turns out to be improvident and it is worth less, he has to pay on the lower value.

Mr. T. GRIFFITHS: So he ought.

Sir J. SIMON: That is a principle which I understand. The only thing I am anxious to find out is whether that which is a good Socialist principle is a principle which is endorsed by the Liberal party. In the third place, may I point out this distinction? The President of the Board of Trade said that he left it to his hon. and learned Friend to deal with. There is no harm in that except that I protest against the idea that this is merely a piece of legal subtlety. It is quite easy to understand the Bill, at any rate, as regards its main purpose. This is a Bill which does not take out every element of value which is due to the expenditure of the owner before you impose a tax upon the land value. It deliberately does not do it.
Let me give an illustration. There is a place outside London, in an area which I know quite well beyond the present bricks and mortar, where the landowners—an Oxford college—who are devoting the whole of the income to education, have spent enormous sums, thousands of pounds, in making roads through what
are at present country fields, in order that they may promote the orderly development of their estate. They have marked down areas which are intended to remain as open spaces, and in some eases vacant plots of land for purposes of churches and chapels. They have spent to my certain knowledge large sums for the purpose of making roads and sewers, all in the course of estate development. I am not suggesting for a moment that it is not done as a commercial proposition; of course it is. [Interruption.] Certainly it is, and the more successfully it is done the more there will be for education. The point, however, is this, that this Bill deliberately refuses to allow the landowner in such a case to subtract the money which he has spent on roads.
I will ask the attention of the House to the Clause. It is Clause 8. The land value which is to be taxed is to be reached on an assumption that there are not upon or in the unit any building, erection or works except roads, and also except certain drainage works. Suppose that you have two properties side by side of the same value and in corresponding position. In the one case, the added value has been created because a trunk road has been driven through it at the expense of the public. In the other case, the roads on the estate have been made by the outlay of the owner. In both cases the value of the land bordering the roads has risen. Is it really deliberately the case that it is intended to tax these two owners, one of whom has spent his own money in making the land more valuable, and the other of whom has stood by and let the public do it, the same amount? The President of the Board of Trade has referred this matter to my hon. Friend the Solicitor-General, and I should be glad to know.
The real truth about it, it seems to me, is that we are in the presence of a new principle, which was stated by the Chancellor in his speech on the Budget Resolution, and I invite the attention of hon. Gentlemen on this side of the House to what he said:
By this measure, we assert the right of a community to the ownership of land. If private individuals continue to possess a nominal claim to the land, they must pay a rent to the community for the enjoyment of it."—[OFFICIAL REPORT, 4th May, 1951; col. 48, Vol. 252.]
That may be a most admirable Socialist sentiment, but it appears to be a form of expropriation without compensation. How anybody who bases his views on the Land Value Duties in the Liberal Budget of 1909–10 can possibly on that account approve of these proposals, passes my comprehension to understand. If you take the view that there should not be private property in land, and that a man who puts his money into land, whether it is a large or small piece, is doing something which calls for some special penalty as compared with putting his money into other things, then this scheme is right. If you are prepared to say, "No, I do not say that, but I say that because land is fixed in position, fixed in amount, and so largely varies in value because of community action, therefore I want to get a contribution in respect of unearned increment," that would be right. For my part, however, I am quite unable to understand how a flat tax of one halfpenny or one penny in the pound, which could easily be increased, on land value without any regard to whether or not the land is covered with houses, without any regard as to whether the person who is being taxed has paid full value for his property, without any regard as to who has provided such communications as roads and drains, can possibly be regarded as justified as long as private property in land is legitimate.
I observe that last week this was to be part of the cargo of the Liberal ship, and I think that the argument was used that, if only we were to take this as part of our cargo, the Liberal ship might, without hesitation, "present its bill of lading to the Great White Throne." Speaking of it as a commercial transaction, I should not have thought there was any reason for a ship to present its bill of lading to anybody at all, because bills of lading are not presented by ships, but to ships. But after all, Buxton is not a seaport, and in its exhilarating atmosphere I understand that this mixture of bad law and the Book of Revelation was very favourably received. If I may venture another allusion, keeping up the metaphor, I would rather say that, to my way of thinking, this is a piece of contraband which has come from a pirate ship; and if I may be still bolder, and still keep up the metaphor, I would
say, in language which was used long ago
Que diable allait-il faire dans cette galère?
The truth is, that unless people are prepared to say they are in favour of the principle of land taxation and what the land tax is does not matter, there is all the difference in the world between the present proposal and the proposal which received Liberal support 20 years ago. I find it quite impossible to reconcile this proposal with the view that a man is just as much entitled to put his money into land as into any other thing. He does not deserve, on that account, to be penalised. While it is perfectly reasonable to make provisions which will secure unearned increment for the community, to my way of thinking it is utterly wrong, as long as we remain a community which respects and taxes private property in land, to treat land in the way in which the Finance Bill treats it.

The SOLICITOR - GENERAL (Sir Stafford Cripps): Following the right hon. Gentleman's metaphor, I gather that he treats himself as the Customs officer on board the ship on behalf of the Tory party. I do not propose to go into the question of the discussion between the Customs officer and the master of the ship, but I will deal with a few of the points which he put forward in this discussion. First of all, I agree with him perfectly that the present Bill is not the same as the Act of 1909–10. I think that has been reiterated more than once from this side of the House, and it is in those differences that we look for the success of this system. No doubt the right hon. Gentleman when he took the active part he did in promoting the legislation of 1909–10 did not do it with his tongue in his cheek, but thought he would succeed. Unfortunately, it has been shown that the system which he then tried to introduce has been a failure. He tried again in the year 1925, and, if I may say so with respect, made a much better shot, because he then proceeded, although dealing with rating and not taxation, upon the basis of a flat rate tax or rate upon all land values.

Sir J. SIMON: I hope the hon. and learned Gentleman will not repeat quite the same unintentional misrepresentation
which has been made before. The Bill, as he will see—and as a lawyer he can see it quite well—was a Bill which was attempting to redistribute the burden of rates. It was attempting to take the burden of rates off improvements and to put it on to the ground. It was not a proposal to impose any new burden whatever, and it has no more to do with the present subject-matter than with the man in the moon.

The SOLICITOR-GENERAL: The right hon. and learned Gentleman is perfectly right, it is a Bill that is perfectly easy to read, and, as one would expect from him, it is an extremely clear Bill. It sets out to say that every rate levied after a certain date shall be levied upon each hereditament
according to the annual land value thereof as hereinafter defined if the same is greater than the rateable value as hereinafter defined.
and apart from the fact that that Measure was dealing with what the right hon. Gentleman has called a redistribution of an existing charge, that is rates, and the present Bill is dealing with a new tax, with the possibility, as has been stated by the Chancellor of the Exchequer, of changing it into a rating proposal at a later date, the two Bills are in principal identical—except, I agree, in one small detail, and that is the question of the cutting out of all improvements. [Interruption.] Some of the hon. and right hon. Gentlemen opposite who cheered so vociferously when they heard the right hon. and learned Member saying how keen he was on the taxation of increment values say now that they do not consider that a small matter. Let me deal with the matter, and see what it is.
The point which the right hon. and learned Gentleman has taken, and which was also taken by the right hon. Member for Edgbaston (Mr. Chamberlain) was the question of the inclusion of the word "roads" in Clause 8 of the Bill amongst the unexcluded matters. That is to say, under Clause 8, Sub-section (1, a, i) roads are left in the valuation; they are not excluded, whereas buildings, works and erections are excluded. The argument put forward is that some of those roads—of course a very small percentage of them, if one takes the whole country—would be roads upon which private individuals have expended money, and, there-
fore, the value of them should not fall to be taken into account in the assessment of the value of the land. I quite appreciate that there is a certain amount to be said for that argument, but one has to bear in mind that there is a very great and real difficulty directly one starts to bring into a land unit the bit of road which may or may not belong to it. We are not dealing here with large developed estates which have not been split up. The case which the right hon. Member for Edgbaston put was the case of an estate which has been split up and sold off in plots for houses. In that case several different sets of conditions may prevail. First of all the roads may not be part of the land units at all, and therefore they could not possibly come into the valuation, whether they were left out by words or not—[Interruption.] If they are not part of the unit of the occupier, clearly nothing can come in. Whichever view you take, they are outside the unit and not in it. Similarly, if one takes the question of sewers. Sewers, the moment they are connected up and sewage is flowing through them, will become a different unit, and will not be part of the unit on which the house is built at all, because they will be in the occupation of the local authority, and therefore not part of the land unit which is occupied by the owner of the house.
There may be other conditions, too, if one takes property which is being developed. The right hon. Gentleman will notice that in the definition of roads private roads are excluded. Therefore, if the builder is making the road and has not sold off any of the plots on the road, that road will be excluded from valuation, because it will not come within the definition of the word "road." If the builder starts building from the main road down the side road, as is generally the custom, developing as he goes and selling off his plots as he builds his houses, he will never, generally speaking, pay land tax on any road at all, because all the road which will be in his occupation will always be a private road. It will not be thrown open to the public until he has developed and sold the whole estate. The person who buys a plot will, however, pay the tax. The position as regards roads is not a very simple one, but the practical question which arises,
the question of really great importance when dealing with the valuation of land plots of this sort, is that it is practically impossible to arrive at any real figure for the value of land at all unless you assume the roads are present. Once you eliminate the roads—and, of course, you cannot deal only with the bit of road opposite a house, you must eliminate all roads in the country—you come down to a condition when it is impossible to imagine a valuation at all. Therefore the leaving in of roads will not create, in fact, any hardships and is absolutely and essentially necessary if a system of valuation is to be carried through which is of any value at all.
Now I come to deal with one or two other questions which were raised by the right hon. Member for Edgbaston. He suggested that this Bill had not been thought out. I am sure he will appreciate that a Bill of this sort, however much it may have been thought out, can be criticised from a number of points of view by taking particular instances. In a complicated system of this sort it is always possible to pick out a particular instance which, without a very lengthy explanation, may appear to be a hardship in a particular case. Therefore, I am sure he will not expect me to deal with his particular instances if I deal with the more general points he put forward. I have dealt already with his first point, as to owners' improvements, because that really concerns roads only. There is no other type of owners' improvement that will be included within the ambit of the valuation, leaving aside such things as drainage and sea walls. [Interruption.] As regards the second point he made, he stated that in his view the tax would fall on thousands of the thrifty poor. An argument of that sort is very much on a par with the argument that this is to attack the dukes. [HON. MEMBERS: "The Chancellors."] I am only saying that it is on a par with that argument, which is appealing to sentiment and not appealing to facts. The right hon. Gentleman quoted the case of a poor spinster, to whom, I have no doubt, he immediately replied that she need not be worried, because she would not be taxed. Assuming that the rates in Birmingham would be somewhere
about 12s. or 15s. in the £ and taking the figure which she gave for her rates, her rent would be somewhere between £25 and £30 a year, and on a rental of that sort it is extremely unlikely that the land value would exceed £120. No doubt the right hon. Gentleman did communicate that to her in order that she should suffer no longer.
7.0. p.m.
The next point the right hon. Gentleman raised was the holding up of the development of the land. That is a point on which, I regret to say, I could not quite appreciate his meaning. He made three statements, as I understood him. First of all, he said that he agreed generally that our proposals would lower the value of land. I think I am correct in that, and that therefore you would get ribbon development; secondly, that housing development would be stopped, because the speculator would not be able to borrow money: and, thirdly, that all land in the vicinity of a town would probably be held up more than at present, because the owner, owing to the tax, would hold out for a bigger profit. I am sure I have represented correctly the three propositions.

Mr. CHAMBERLAIN: For a bigger price.

The SOLICITOR-GENERAL: I am much obliged to the right hon. Gentleman. What I cannot appreciate is how he is going to get this great extension of ribbon development when housing development is going to be stopped. He does not mean that ribbon development is done with ribbons, because it is done with houses. The right hon. Gentleman will agree that those two arguments must cancel one another out. The real truth of it is that neither of those two results will happen. Ribbon development is no more likely to take place under this Bill than it was before. The only thing which will ever effectively stop ribbon development will be town planning. As regards housing development, if anything the argument that the land will be cheapened by this tax is the correct one, and that inevitably will lead to more housing, because what are in effect the raw materials of housing will be cheaper.
There was a further point which the right hon. Gentleman took as regards the
burden on industry of this tax. He said there was no principle as to the incidence upon industry of this burden. I am sure the right hon. Gentleman has clearly in mind what principle there was in the application of de-rating to industry, because, if he takes precisely the example which he gave us, as regards the shipbuilding firm and the motor manufacturing firm, exactly the same arguments apply as regards de-rating as he sought to apply in the taxation of land values, only in a much more acute form, because of the rating being upon the value of the buildings and not upon the value of the land. It really is a fallacy to say that this tax is going to be any drawback at all to the industry of this country compared to the enormous and, as many people think, undeserved benefits they got from de-rating.
A further point was taken by the right hon. Gentleman as regards statutory companies. That has been answered already by my right hon. Friend who has spoken before me, but perhaps there is one point I might add as regards railway companies. The principle of the exemption of the railway companies as statutory companies depends of course upon the control of their financial position under the Act of 1921. They are quite unlike the independently managed shops, to which the right hon. Gentleman referred, who are not controlled in what they may charge or in the amount that they may pay in dividend. That is the essential difference which justifies the distinction between the statutory undertaker and the ordinary undertaker, because anything that is added to the statutory undertaker, seeing that he is in a controlled position both as regards charges and profits, may be passed on to the person who is buying the freight services from him.
The last two points to which the right hon. Gentleman referred included exemptions, in which he dealt with churchyards and with disused churchyards, thinking perhaps they were an even more ridiculous thing to include among the exemptions than the churchyards. Perhaps he is not aware that nearly all disused churchyards are used as open recreation spaces in the towns.
The two matters about which he expressed especial anxiety were playing fields, and church schools. As regards playing fields, the position is a very diffi-
cult one indeed and one which the Government are very anxious to meet, if anyone can devise suitable words by which to meet it. Playing fields are divided into a great number of categories. All those owned by local authorities are already excluded. A great number, which have been or will be town planned before the tax becomes operative, will be excluded, as the right hon. Gentleman stated, by reason of the Town and Country Planning Bill and the Schedule to the Bill. There are a great many commercial playing fields around London for instance which are merely commercial assets of people carrying on business in London and run as part of their business. On the other hand, there are a large number of playing fields which it is extremely desirable should not be diverted from their present use. The trouble is one which the right hon. Gentleman himself pointed out, that these playing fields are most of them, or a great number of them, merely land which is awaiting development and, as soon as the owner thinks that he can get a good price, the playing field use stops.

Mr. CHAMBERLAIN: Will it not stop under the Bill?

The SOLICITOR-GENERAL: It will not stop any more under the Bill than it does at the present moment. The right hon. Gentleman will appreciate that, if it ware left open to everybody with ripening land anywhere near a town to obviate the incidence of the tax by saying "This is a playing field," it would, of course, largely defeat the object of the Bill. As regards the question of church schools, again, if a suggestion were made in Committee stage, I do not think the Government would necessarily be hostile to the exclusion of church schools, because they are, in our view, practically on a par with the ordinary schools belonging to the county councils which have already been excluded. I come to one other question with which the right hon. Gentleman dealt, and that is allotments. The position as regards allotments is that they are agricultural land used for agricultural purposes. "Allotments" is an agricultural purpose under the Bill. It is an agricultural purpose which gives a higher value than ordinary agricultural land. The tendency, therefore, will be—so far
as there is a tendency created by the Bill—for land which is near towns to be used preferably for allotments, because then the cultivation value of it will be higher than the land value of it if it were simply used for grazing. There will be in that way an encouragement to the turning of land, which is awaiting development, into allotments rather than leaving it vacant or letting it simply for grazing purposes. As regards the allotments themselves, the right hon. Gentleman will agree that the great part of the land privately owned, of which he spoke, is land in comparatively less populated districts. Everybody knows the vast numbers there are throughout the villages of this country. Nearly every village has got its allotment field and in nearly every case that allotment field is a privately owned field. As regards those, it is probable that the cultivation value will often be as high as the land value, so that those will not be taxed. The allotments, which are the property of the local authority, will not be taxed either. I do not think that the right hon. Gentleman need be afraid that the incidence of this tax will deplete the amount of land available for allotments. It is far more likely that it will increase the amount of land available. I have dealt shortly with the points raised—

Sir A. CHAMBERLAIN: The right hon. Gentleman the President of the Board of Trade promised me I should have an answer from the Solicitor-General about the colleges, endowed schools and hospitals, particularly about their endowment.

The SOLICITOR-GENERAL: I apologise for having overlooked the point. The point which the right hon. Gentleman raises is a point which, in my view, is not one which arises out of the taxation of land values; it is merely a point of exemption from taxation generally. The lands, to which the right hon. Gentleman refers, are lands in which various institutions, charitable and educational and others, have invested their money. They are not lands which they are using for their purpose, whatever the charitable purpose may be, and, therefore, the position is that these bodies have chosen to invest their money in that particular way in preference to putting
it into War Loan or any other investment. That must not be looked on as a problem of taxation of land values at all; it is a question merely of whether you desire to give that class of people a further or special exemption from taxation. As the right hon. Gentleman knows, in the case of Income Tax those people have been exempted, and the view that the Government have taken on this Bill is that there is no reason why there should be any further exemption of those bodies as regards their investments. He will see that the property, which they actually use for the purpose of carrying on the hospital or whatever it may be, is exempted in some cases, but, so far as the investments of those bodies are concerned, it is not proposed and it is not arranged in the Bill that there shall be any exemption.
I have, I hope, covered generally all the points put to me, and I now want to say one word as regards the general point put by the right hon. Member for Spen Valley (Sir J. Simon) in relation to the basis upon which this system of taxation is really founded. My right hon. Friend the Chancellor of the Exchequer stated, when he was speaking, that in his view the community had in some sort a right in the land. Right hon. and hon. Gentlemen opposite certainly in the not very distant past, if for "the community" were substituted "Crown," would undoubtedly have agreed with that proposition, because it is not so long ago since all land in the country was the Crown's and it had a right of service from everybody who held the land. It is only an extension of the same idea to say that the Crown or the community is entitled to some share from those people who use the land, because the amount of land is limited, and that to those, who have the privilege of using the limited amount of land, the community is entitled to look for some recognition of that privilege. The right hon. Member for Edgbaston said that, when I spoke before, I said that the tax was based upon the improvements made by the State. I certainly did say that, but I did not intend to suggest—and I do not think my words tended to suggest—that they were based on that alone and not on some of the improvements made by the owner as well. After all, if the tax were based only
on the improvements made by the community, it would be legitimate to take a far greater proportion than it is proposed to take now. It is impossible, as regards any property in this land, however much the owner may have spent on it, to deny that a large part of the existing value is due to the community and that the maintenance of that value from day to day is due to expenditure by the community. It is because of that position as between landowner and the community that we say it is right and proper and fair to put a tax upon land values.

Mr. BUCHAN: The hon. and learned Gentleman who has just spoken has clarified my mind on a number of important matters, but he has not met the question which was put by my right hon. and learned Friend the Member for Spen Valley (Sir J. Simon) as to what is the exact meaning of the essential principle upon which this Measure is based. This is a Second Reading Debate and not the Committee stage, and I should therefore like to say a few words upon that essential principle, as far as I understand it. The land taxes seem to be wrong in theory and to be unfair in their incidence. As the right hon. and learned Gentleman the Member for Spen Valley said, there is no difference of opinion in any part of the House on the general question that, where land increases in value out of nothing done by the owners, that increment should, in large part, belong to the State. That is a matter upon which, I think, we all agree. The land taxes of 1900 and 1910 were based upon that principle. The trouble about all taxation of the kind which deals with a highly complicated subject-matter is that, in order to be equitable, it must be complicated, and it therefore becomes difficult to carry out and its yield is apt to be small.
In his former system of land taxes, my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) tried honourably to make the taxation equitable. He found as a result, that it was hard to work and unprofitable. What are we to say about the principle of the new land taxes? Their machinery is simple enough, but it is the simplicity of gross injustice. I cannot see any principle of equity upon which they can
be based. They are not taxation of unearned increment, which all agree is legitimate. They are an addition to the Income Tax, charged upon a particular kind of property. They are a tax upon capital values, although the tax must of course be paid out of income. I can imagine that, under certain conditions, that might be a justifiable way of raising revenue. In a society where everybody was a landowner, where the possession of land was universal, and where the interests were all the same, it might be a very reasonable way of raising revenue, but that is not the kind of society in which we are living to-day.
In the early stages of our discussions, parallels were drawn from various countries which possess a system of taxation of capital land values, but I cannot see how these parallels can be applied. There is no country on earth which possesses capital land-taxation and which, at the same time, possesses a burdensome Income Tax such as we have, a tax which falls most heavily upon every form of landed income. I find it very hard to discover either the purpose or the principle of these new land taxes. Is it their purpose to cheapen land for public purposes? If that is their purpose, then the whole system of valuation is highly faulty. Is it their purpose to hit the speculator? They do not hit the speculator; they hit his victim, the bona fide holder for value. The only thing I can think of is the argument suggested by the right hon. and learned Gentleman the Member for Spen Valley, and that is, that they are based on the principle that there is something wrong in the actual holding of land in private hands, something anti-social, upon which the State should have no mercy. I quite understand that argument. It is an intelligible, though perhaps not a very intelligent, argument, but it is not the argument of the Government.
The Chancellor of the Exchequer, in famous and familiar words, told us that the land "had not been given by the Creator for the use of dukes only, but for the use of all His people." I pass over all the theological implications of that declaration, and take only the practical consequences. This Finance Bill permits exemptions to the tax: therefore, in the eyes of His Majesty's Government, there must be some forms of land-holding which are innocent and legitimate, and which
are not to be taxed; some and not others. Therefore, I think we must construe the final words of the Chancellor of the Exchequer's declaration in a special sense. Who are God's people? Who are the peculiar people in whose hands the possession of land is innocent? First of all, they are the Government Departments. Then they are the local authorities. Then there are certain types of farmer. Then there are the railway companies, the gas companies, the electricity companies and the water companies. Then there are the people with land that does not exceed £120 a year in value. And last of all, there are the dead, for the churchyards are exempt. It is comforting to know that in the end we shall all lie in untaxed soil. That is a most interesting and instructive and, in a way, exhaustive list. I venture with all respect to suggest that it is an inadequate interpretation of the will of the Divine Father.
I would like to add one word upon a matter on which I am deeply interested, and which has been already referred to by previous speakers; that is, the effect of the land tax upon the preservation of rural England. Despite the best intentions in the world, this tax is going to drive land-owners, who would otherwise take a wide view of their responsibilities, into a premature sale of their land, because it is taxed upon the unrealized value, and they will naturally try to realize it. In spite of the optimism of the Solicitor-General, I cannot see how the taxes can avoid increasing ribbon building along our high roads and jerry building in our suburbs, or can avoid giving a great impetus to dangerous mushroom development. The Government have another Bill now in Committee, an excellent Bill which I think is accepted by every section of the House, the Town and the Country Planning Bill, which attempts to provide for the development of England on rational and intelligent lines and to give to the community the resulting betterment. This tax will defeat the purpose of the Town and Country Planning Bill, and it will increase the very evils which that Bill is designed to solve. It will make it harder than ever to preserve for amenities land which may have a future commercial value, and will make it harder for a well-meaning landowner to protect
rural England. If the Government continue these proposals in their present form, they will deserve the bitter words of the Roman historian in that they will be the makers and the breakers of their own laws. They will have produced a sound policy in one Bill, only to wreck it in another.

Mr. GORDON MACDONALD: My suspicions are somewhat aroused by the discussion which is proceeding upon the legal technicalities of the land section of the Finance Bill. Is it the intention of hon. Members that we should discuss these technicalities, which will be far better discussed in the Committee stage, in order that we may be blind to some of the suggestions made as to the way in which the expenditure involved in this Finance Bill ought to be met? It is not my intention to follow along those lines. I consider that the reply of the Solicitor-General was of such a character that that part of the Debate can now be ended, and that we may pay some attention to the earlier part of the Amendment put forward by the Opposition. During the Committee stage of the Budget Resolutions, we heard very much about the huge expenditure involved. We were told that expenditure must be substantially reduced; otherwise, disaster faces the nation. On these benches we have no desire to see national disaster, but we sometimes wonder what is meant by that term. Are we to believe that it is a national disaster to ask for taxes from those who can well afford to pay, in order to meet the necessities of those who are in a very impoverished condition.
The disaster that many of us fear is of a more drastic character. We deprecate some of the statements made by the Chancellor of the Exchequer in introducing his Budget, because we see a danger that, later on in the year, sacrifices will be asked from the poorest sections of the nation. We are also very much afraid of the suggestions made this afternoon by the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain), when he said that the amount involved in the Unemployment Insurance Fund is such that, if something is not done, it will bankrupt the nation. It may be that the expenditure is very high—and it is; it may be that there is room for substantial reduction in expenditure—and there is—
but it is not from the unemployed, by any means, that reductions ought to be asked. That ought to be the last place to look for the reduction of national expenditure. The unemployed are the most needy section of the nation. As regards dealing with abuses, when you have reviewed all the so-called abuses, you will not have reduced national expenditure very much. I have never found the party opposite very keen about reducing expenditure on certain items. If any suggestion is made as to dealing with interest on War Debt, we are told at once that that is repudiation. If any suggestion is made as to reducing expenditure on the Army, Navy or Air Force, we are told that we may endanger the national security. I suggest that we shall endanger the national security far more by reducing national expenditure in the direction of providing for widows, orphans and unemployed than by providing for substantial reductions of expenditure on the Army, Navy and Air Force.
I find, in a publication sent out by a body of employers closely associated with the party opposite—the Federation of British Industries—the statement that it is a crying and urgent necessity that there should be a vast reduction in national expenditure on a scale sufficiently large to render further taxation much less onerous. It goes on to say that at this stage an examination and combing out of administrative expenditure could only be productive of relatively small results, and that analysis shows that the great majority of the increased cost is due to major changes of policy. Finally, it says that this does not mean that there are no immediate economies to be made; that such economies are possible; but that industry can only look for major relief by a reversal of many policies of wild expenditure which have been undertaken since the War.
There we see the danger. We suggest to our Front Bench that they must be very reluctant indeed in adopting any recommendations from any Commission which in any way endanger the livelihood of millions of people who, through no fault of their own, are unable to find employment. I find that the party opposite raise objections with regard to the method of providing for the expendi-
ture. They would like to see other methods pursued. They have suggested in a very mild way that indirect taxation would be a better method of securing the revenue necessary for discharging the national expenditure. I am surprised that they should think it possible in 1931 to get the vast mass of the working class of this country to believe that indirect taxation which will fall on the shoulders of that vast mass is a better way of dealing with national expenditure than direct taxation on the shoulders of those best able to bear it. In the "Economist" of the 18th April, the editor, in dealing with the question of a so-called revenue tariff, made this very significant statement:
Of one thing we are certain, that Mr. Snowden will eschew the alluring device of a so-called 'revenue tariff' which has been urged upon him from many distinguished quarters, and that he will avoid the disastrous mistake of a radical change in the fiscal policy of this country at a time when such a change would add to the difficulties of precisely those chief export industries in which the large bulk of unemployment is concentrated.
We on these benches are pleased that the Chancellor of the Exchequer has not included a revenue tariff in the Finance Bill. After all, we are surely entitled to ask for a further distribution of the wealth of this country. Surely no one on the opposite benches will suggest that the present distribution of wealth is a satisfactory one. To quote from a book which will not appeal to hon. Members opposite, the Liberal party, in their publication "Britain's Industrial Future," dealing with this question of equal distribution in wealth, have this statement:
A more equal distribution of wealth is so important, it is indeed so imperative to move steadily and manifestly in this direction if we are to build up a truly democratic society secure against the evil passions and subversive dangers of class hatred, that we must be careful not to discard on inadequate or ill-considered grounds a policy which makes for the better distribution of wealth.
Yesterday the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) implored us to deal with Russian activities in order to prevent revolution in some parts of our Empire or in this country. I suggest to the right hon. Gentleman that, if he wants to prevent revolution in this country, he
need not worry about the Communist party, but that what will cause a revolution, if anything, will be the unfair treatment that hon. Members opposite suggest for the poorer classes in this country.
I agree that to ask for an increased contribution from Income Tax payers during this financial year is asking them to shoulder a heavier burden, but surely it is not suggested that they are not in a position to shoulder it? I should have preferred to see the Chancellor of the Exchequer, rather than asking for an extra payment during the present financial year, placing an extra burden on Income Tax payers so that at the end of this year he could decide whether he should then remove that increase of 3d. or 6d. which he had put on. That would have been a far better way. It would have represented no heavier burden than the present method, but it would have left the Chancellor of the Exchequer in a position to decide at the end of the year whether the increase should come off. The danger is that he will find himself in some financial difficulty at the end of the present year. I suggest that this Budget is an attempt, at a very severe time for industry, to avoid putting increased burdens on industry. It may be that other methods were adopted by hon. and right hon. Gentlemen opposite, but no more effective or better method from the point of view of industry could be adopted at the present moment. There is only one effective way of dealing with the question of unemployment, and that is to provide work for those who are unemployed; and the party opposite ought to be the last to suggest that this Government has not done more in two years than they did in four to solve that problem. The "Northern Daily Telegraph" of the 21st April contains this statement relating to Sir George Paish:
According to Sir George Paish, £100,000,000 spent annually on productive consumption—that is, on food, clothing, houses and furniture—would find work for 2,000,000 people.
We suggest that this Bill, though weak in many parts from our point of view, does provide some of that £100,000,000 for those who need it and who will spend it on productive consumption. The right hon. Gentleman the Member for Darwen (Sir H. Samuel) referred last year to the Finance Bill and the Budget as prim
and grim. I am afraid that this Budget has lost some of its primness, but it has not lost any of its grimness, and no Budget will ever lose any of its grimness so long as the position of the working class of this country remains as grim as it is in these days. I gladly support the Second Reading of the Bill.

Sir HENRY BUCKINGHAM: I will leave the suggestions of the hon. Member for Ince (Mr. G. Macdonald) to be considered by the Leaders of his party, and will ask the House to pass for a few moments from the discussion of the valuation and taxation of land to the quieter paths of Income Tax administration. Hidden away in a distant corner of the Finance Bill—Clause 32—there is the suggestion that a very important change should be made in Income Tax administration. It appears, on the face of it, to be a small change; it is simply the suggestion that the appointment of Income Tax collectors should pass from the hands of the General Commissioners into the hands of the Commissioners of Inland Revenue. Although it appears to be a small change, and although, to the larger taxpayers and the larger companies, it will make very little difference whether the tax is collected by collectors appointed by the Inland Revenue Department or by the General Commissioners, I hope I shall be able to show the House that to the great majority of taxpayers, to hundreds of thousands of small taxpayers, this change may be a matter for very serious consideration.
The Income Tax payers of the country have a very rough idea as to the administration of the tax. They get thoroughly confused among all the bodies of Commissioners that exist. There are the Inland Revenue Commissioners, the Special Commissioners, the General Commissioners, the Additional Commissioners, and the Appeal Commissioners, all of whom function in some way in connection with the administration of the tax; and these bodies of Commissioners are, broadly speaking, divided between representatives of the Crown and representatives of the taxpayer. I think the public generally have a sort of vague idea that there is some body of Commissioners standing as buffers between themselves and a rapacious Government Department, and, therefore, anything which affects that balance must be of very great
interest to the taxpayer. It is not surprising, therefore, that the proposal contained in the Bill was received with a chorus of well justified apprehension in the Press. The proposal contained in the Bill is not simply a reform in Income Tax administration; it is nothing less than a revolution, as I hope I shall be able to show to the satisfaction of the House; and, if this revolution is carried out, it will represent a very great and long desired triumph of bureaucracy over a law-abiding people.
Why do I call it a revolution? From the very initiation of the Income Tax, as far back as 1842, and in the even earlier times of the old Land Bills, the imposition of the Income Tax, its assessment and its collection, have been carried out locally by the taxpayers themselves. It has always been their own representatives, their Commissioners appointed by Act of Parliament, who have assessed the tax upon them, collected it, and handed it over to the Crown, and with certain exceptions—Scotland, for example, and a few places in England—that principle remains in force to-day and works efficiently and well. I do not think it is necessary to survey the long struggle which the Inland Revenue authorities have maintained in their endeavour to get control of these powers which I have briefly described, but it will be within the recollection of a great many people in this House that for many years a continuous nibbling policy has been pursued in each Finance Bill which has been presented to the House, and the result has been that the powers of the Income Tax payers' representatives have become weaker, and the powers of the Inland Revenue stronger. Now they have ceased their nibbling policy altogether, and have come out boldly and openly, under the aegis of a Socialist Government, with a proposal to take over all those powers of the Commissioners which refer to the collection of tax. This must of necessity result in the loss by the Commissioners of the power of assessment also. If I am able to satisfy the House on that point, I am sure hon. Members will agree that I am not exaggerating at all when I say that this is a revolution.
Will the House consider the exact nature of the proposals and their inevitable results? The Inland Revenue
have come to a certain arrangement with the Association of Collectors and Assessors under which the duties and appointments of the collectors are transferred to the Commissioners of Inland Revenue. I do not think it is necessary to worry the House by criticising the methods of the Inland Revenue in the matter of reaching that agreement, although there is a good deal that I might say about that. It is sufficient to say that, subject to the House accepting the proposals of the Government, we are facing a fait accompli. The Inland Revenue have literally starved these deserving public servants into surrender, against the better judgment of a large proportion of them. For many years these people have been paid starvation wages for the very responsible work which they have efficiently performed, and now at last they can no longer stand up against the bribes offered them by the Inland Revenue of Civil Service pay and status provided they are prepared to forswear their old masters. The decision of this association is not to be wondered at and no one can reasonably blame them but the claim that the Inland Revenue make that these people by accepting Civil Service pay and status can be more efficient public servants is of course utterly ludicrous.
I said just now that the decision accepted by the collectors and assessors was made against their better judgment. I should like to read a portion of a speech made by the President of the National Association of Assessors and Collectors as recently as September, 1928, when negotiations were going on between them and the Inland Revenue:
As regards the proposed appointment of all collectors by the Board of Inland Revenue, it cannot be too clearly made known that the scheme of centralised collection substitutes for the men who in most cases have resided for a number of years in the district, and to whom the circumstances of the taxpayer were known, a machine from which all personal interest has been eliminated. It cannot be denied that the maximum amount of Income Tax has been collected with the minimum of friction under the existing system and I feel confident that the taxpayer will resist any change which will deprive him of the opportunity of seeking the advice and assistance of a local man to whom he has been accustomed to disclose his personal affairs and from whom he can always rely upon receiving courteous and considerate treatment. He will, if the position is made
clear to him, be very wary of placing himself entirely in the clutches of the taxing machine and will remember that one does not stand much chance if the Devil is judge and the court is Hell. The Chairman of the Board of Inland Revenue also informed the same Committee that, if only the board had the appointment of all collectors, it could save at least £100,000 a year. Nothing is said of what the individual taxpayer will lose through the abolition of the personal element. After the taxpayer has been bluffed, he will be bludgeoned.
Those are not my words. I should hardly dare to use such strong expressions as the president of this body, which has accepted the very terms he was thus describing.
I have said that if collection goes to the Inland Revenue the appointment of assessors must go too. Let me prove that. In nearly all cases the collectors and assessors are the same people. The work of the two offices dovetails together and the combined remuneration of assessors and collectors has made up the miserable pittance which they have been paid of recent years. The actual amount paid for assessment of the taxes is very small so that, if the appointment of the collectors was taken from the Commission, the remuneration left for the business of assessment would be so trifling that the Commissioners would be unable to find people who would undertake the job, and the result is inevitable, that the Commissioners will be obliged to appoint as their assessors the same men who have been appointed by the Inland Revenue as their collectors, and I can see no difference between this situation and the appointment of both collectors and assessors by the Inland Revenue. The only possible alternative to that position is that sufficient funds should be placed at the disposal of the General Commissioners of Taxes to appoint whole-time assessors at a reasonable remuneration. That would cost the Treasury a very large sum of money, and I should be glad to know if it is the intention of the Government to carry out any such suggestion as that, as there is no mention of it in the Bill. A priceless document has been issued by Somerset House with the idea of calming the fears of the public and of the Commissioners. It pretends to set forth the advantages of the change to the taxpayer, the Crown and the collectors. All those advantages are purely illusory-I only wish there were time to examine
them more in detail, but perhaps the Committee stage will be a more suitable opportunity. If there is any advantage in the change, there is no possible reason why it should not be given without destroying the whole principle of local control. The last paragraph of this document, referring to the Press references, says:
There has been a fear that, in some extraordinary and obscure fashion the Government's proposals tend towards the curtailment or the jurisdiction of the Commissioners as the authority for the determination of the taxpayers' liability.
Then the Inland Revenue authorities hold up their hands in pious horror at the very idea and go on to say:
Such fears find no support in the proposals of the Government. Moreover, it imputes a design which would be disapproved both by the board and by all responsible opinion upon Income Tax administration of which they are aware.
How many tongues must have been in how many cheeks when those words were written, for that is the very thing they want, and they know that what I say is true, that if they once get control of the appointment of collectors it must automatically follow that the appointment of assessors will also be in their hands. In other words, the officials of the Inland Revenue will have complete control of the whole of Income Tax administration. I should be the last person in the House to suggest that administration of the Income Tax is perfect. There are many things about it which are imperfect, but it is time these pinpricks and sudden attacks upon the privileges of the Commissioners should cease and that we should have some kind of Commission or Committee appointed which would examine the whole question of administration very closely. It would be more dignified, and it would be possible to come to a conclusion as to the improvements that could be made in the administration of Income Tax, and I make that suggestion to the Government. I have- given a broad picture of the situation, which I could fill in in detail when we reach the Committee stage. I hope I have said enough to show the House that the powers contained in the Bill want careful watching and consideration and that taxpayers want all the protection that they can get from Members of the House.

Sir GODFREY COLLINS: I rise to make a few observations about the financial policy of the Government as expressed in this Bill. When the Budget was introduced I, like other Members, had a feeling of relief. It is undoubtedly a wise Budget. But, on further reflection, I very much regret that the Chancellor of the Exchequer introduced such a Budget. It seems to me that the attitude of the Government is fundamentally different from what they had a year ago, and on this subject I naturally differ from them and from my hon. Friends who have addressed the House. What a contrast to last year! The Chancellor of the Exchequer at that time appeared to have one over-riding idea in his mind, which was to maintain British credit. This Bill does not seem to be based on that policy. I am well aware of the difficulties, created through worldwide conditions, but he appears not to have faced the unpleasant realities of the situation and to have adopted expedients for which we on these benches attacked the late Government year by year. He has, indeed, put another screw on to the direct taxpayer, and he again depends upon the proceeds of borrowed money to augment the annual revenue. There is nothing easier than to pay your way for a time by forestalling your revenue, realising your capital and using the proceeds to balance your annual Budget. Little harm might result from that policy for a time if we were not faced with the greatest National Debt in the world, and the very high rate of interest which we are paying on our debt.
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The trouble with which industry is faced is the high rate of interest paid by the Government on War Stock, and the problem of the Chancellor and of the House of Commons, as I see it, is how can national policy help to increase the prosperity and the wealth of Great Britain so that the Treasury can collect the necessary revenue. It is from that standpoint that I approach the Budget. The Chancellor of the Exchequer prides himself on his surplus last year, a surplus secured by the highest direct taxation in the world, by draining industry of its resources, by placing much heavier burdens on the direct taxpayers here than in any other country. These burdens have directly handicapped our
traders when they have competed in the markets of the world. It is sometimes thought on the benches opposite that direct taxation does not hurt industry. I suggest that that is a great fallacy, and that the working classes are suffering because Great Britain has the most heavy taxation in a direct way in the world to-day.

Mr. SAN DHAM: It is a great joke !

Sir G. COLLINS: It is not a joke to those who are suffering.

Mr. TINKER: If taxation has to be put on, should it be indirect or direct?

Sir G. COLLINS: I will come to my specific points in a few minutes. I am submitting that our industrial classes are suffering, and that people are out of work because of our high direct taxation. I will endeavour to show hon. Members why. The high direct taxation to-day is partly due to the high rate of interest which is being paid on our National Debt. The character of the National Debt is weighing heavily on industry. I want to put this to the Chancellor—that until the Five Per Cent. War Loan is converted, British traders are heavily handicapped when they compete with world manufacturers in neutral markets. Every British industry, if it needs money permanently for its business, is being forced to pay at the rate of about 6½ per cent. This is due to the fact that British Government stocks until recent days have been based on a 5 per cent. basis, and if the British Government are unable to borrow below 5 per cent., traders are unable to borrow below 6½ per cent. If the Government could borrow at 3½ per cent. our traders could borrow at 5 per cent. American traders competing with us in the world markets are able to borrow at about 4½ per cent. Therefore, every British manufacturer is handicapped severely when he is competing with American manufacturers, because he has been forced to pay, by the high rate of interest the Government pay, some 2 per cent. more than the American manufacturers. That is why I suggest that our traders are handicapped by high direct taxation, which tends to keep up the rate of interest the British Government are paying to-day.
I approach the Finance Bill from this point of view—will it enable the Chancellor to convert the Five per Cent. War
Loan to a lower rate of interest? I sincerely hope it will, but, as far as I can see, by not facing the realities of the situation his Finance Bill will not enable him to convert Five per Cent. War stock to a lower rate. Financial conditions will be favourable during the year. Trade is bad and capital is seeking employment, but there is a lack of confidence. I have no desire to stress the point unduly or unfairly, but there has been a lack of confidence because the present Chancellor in his financial statement did not face the realities of the situation. [Interruption.] Hon. Members say "Get rid of him." If we get rid of him, so far as I can see, we shall be faced with a tariff in this country, and the Chancellor's statement on the Free Trade issue won my support and commanded my admiration. Why the Conservative party should choose this moment, when trade is bad and when our prices are higher than our competitors, fills me with wonder.

Mr. ARTHUR MICHAEL SAMUEL: The hon. Member made a statement about the high rate of interest the Government are paying on their debt. What does he mean? As I work it out, the rate of interest the State is paying on the whole of its nominal debt of £7,500,000,000 is £293,000,000, that is 3⅞ per cent., less Income and Super-tax, which brings it down to 2¼ per cent. or 2½ per cent. I hope the hon. Gentleman does not mean the gross rate of interest is more than 5 per cent., because that is not the fact.

Sir G. COLLINS: Perhaps I did not make my argument quite clear. I approached the Finance Bill with this simple question: How far will it hurt or help British industry? If British industry needs bullion to finance its business for long-term investment, every manufacturer is required to pay about 6½ per cent. for the loan of the money. That is because the Government are borrowing at 5 per cent. If they could borrow under 5 per cent., then the British manufacturer would be able to borrow under 6½ per cent.

Mr. SAMUEL: They are not borrowing at 5 per cent. At the moment, Treasury bills are 2¼, and the complete overhead amount of interest is under 4 per cent. The Financial Secretary will bear me out.

Sir G. COLLINS: The hon. Gentleman is aware that Treasury Bills are short-dated. If a manufacturer wants to borrow money permanently to develop his business, he cannot do it through temporary overdrafts or short-term bills. He must go on the London market, and invite people to invest their money for a long period of time. Anybody who has had experience must know well that no manufacturer to-day can borrow for a long period under 63/4 per cent. I think I have dealt with that interruption. Some hon. Members asked why I do not therefore endeavour to upset the present Government? I was referring to the Free Trade pronouncement of the Chancellor of the Exchequer, and I was wondering why the party above the Gangway seized this opportunity to press their tariff proposals on the counutry, at a time when trade was bad and prices high. It seems to me that a tariff wall round this country is an admission of defeat, an admission that British traders are unable to stand up successfully against foreign competition, and that they need the assistance of the State to meet that competition. I have enough confidence in the ability of my fellow-countrymen to believe that if they stand fast to the present policy of free imports, and organise their businesses as other traders are doing in other parts of the world, we shall come through on top. That is my reply to the right hon. Gentleman who asked me why I did not on this occasion endeavour to upset His Majesty's Government.
There is one other point I want to put to the Financial Secretary. He will recollect that the balance of trade in favour of Great Britain is steadily falling. I have in my hand the last report of the Midland Bank, in which they clearly bring out that the balance of trade in favour of Great Britain is showing a sharp and steady decline. The figures are: in 1928, £143,000,000 in favour of Great Britain; in 1929, £131,000,000; and in 1930, the figure has fallen to £44,000,000. The Financial Secretary will note the sharp downward curve in these figures. They are in striking contrast to our pre-War experience, and tend to show that Great Britain is living perilously near her income, if not above it. I was hoping that the Chancellor, when he introduced
his Budget, and in his latest speeches, would have brought vividly before the country as a whole the true financial results of our present policy. It seems to me that the downward curve is increasing and we are living perilously near our income.
The worst feature of this Budget, and of other Budgets of recent years, has been that we have depended on the sale of capital assets to balance our revenue. I suggest to the Financial Secretary, and he will correct me if I am wrong, that neither this year nor last year was there a real Sinking Fund. By that I mean a surplus of annual income over annual expenditure. While national capital is being spent and treated as income, false and artificial prosperity arises. The situation, perhaps, is more apparent in the case of an individual than in that of a nation. We have all known or read about the position of men who have run through their money. While they are spending their capital, they are giving prosperity to those around them who partake of their generosity and hospitality. But when their capital is spent, the employment disappears and the hospitality ceases. It seems to me that this year, at any rate, and I think it is true of last year, Great Britain is living beyond her means. It has been pleasant while it has been going on, but unless we change our policy and live within our income, the situation in future will be worse than it is to-day.
I might be asked, How can these things be stopped? I look back to history and find the same situation arose 100 years ago. In those days the House of Commons was not subservient to the Government of the day. When the Government of the day wanted to impose taxation and the House of Commons refused it, the Government did not resign. Therefore, owing to the lack of revenue that year there was a deficit, but as there was a deficit one year the Government curtailed their expenditure, and there became a surplus in the following year. It seems to me that only by a barren Treasury will this Government or any Government be brought to face the realities of true economy. The only good thing about the present Finance Bill is that we may be faced with a real deficit which may make all parties realise
that we cannot continue to go on as we have been doing since the War. Since the War there has been no Liberal Budget introduced into this House.

Mr. SANDHAM: What a pity!

Sir G. COLLINS: In all sincerity, I think that it is a great pity. I believe that Great Britain would be finding more work for people to-day if a truly Liberal Budget had been introduced 10 years ago. You cannot make a country rich by borrowing money, realising your assets and giving good times, which are really artificial times, to the people. You may fool the people and give them pleasant times for a while.

Mr. MAXTON: In Greenock?

Sir G. COLLINS: Or anywhere else. This is a doctrine which I have preached in Greenock for 21 years, and I am still a Member of the House of Commons. As long as these artificial conditions exist, we are not facing the realities of the situation. The present Government last year faced the question, but they appear to have allowed politics unduly to enter into their financial considerations this year. This may be a serious statement to make to them. I say, in all seriousness and sincerity, that they have allowed politics, and not the financial credit of Great Britain, to determine their policy this year, and it is because of that that I shall not be able to support them in the Division Lobby. Their Budget has not instilled confidence. It will not increase confidence, and it will not develop confidence. Confidence and hope are what Great Britain needs today. We have great natural advantages here. Our Free Trade system enables us to compete successfully and at an advantage in the neutral markets of the world. We are an adaptable race and our workers are known for their skill. All these are great national advantages, but the Budget does not instil confidence. It is planned for the day. As I look at the late Chancellor of the Exchequer, I see him as a solitary figure in his party, because, in my judgment, for five years he allowed politics to enter into his financial considerations. We see him now left alone in his party. The present Chancellor is not facing the realities of the situation through concealing from the people of this country the real situation, and whether history will
repeat itself, and he will be a solitary figure in his party, time alone can show. I regret to say these things in his absence, for I have a great personal regard and admiration for the present Chancellor of the Exchequer. I feel that he has missed his opportunity. I am profoundly sorry. I regret it. I think he would have been better advised, however unpleasant the task may have been, to have faced the realities of the situation, and invited the House of Commons to adopt another policy.

Sir CHARLES OMAN: There are three points in regard to this Budget which I wish to make in the few minutes I shall occupy the time of the House. All Chancellors more or less, in my experience, leave undone the things which they ought to do, and do the things they ought not to do. I am dividing the doings of the present Chancellor of the Exchequer, whom one regrets not to see in his place, into those two categories. The first is that he has done things that he ought not to have done. One part of his Budget is an amelioration, a reduction and a benefit, in the interests of a particular class of people. It is intended to benefit those whom I personally regard as my most bitter enemies—the motor cyclist. This Bill contains only one provision for the reducing of duties, and that is for the benefit of the motor cyclist. As a conscientious and perpetual pedestrian, I have the greatest objection to motor cycles, and I have no desire to see them multiplied. The lorry or the private car may slay its thousands, but it is the motor cyclist, hiding behind strange obstacles, coming out of side streets at an enormous pace, and generally making most horrible noises, who is my particular enemy. High Street in my town is almost impossible because, in trying to keep time and pace with other traffic, he dashes in, hides behind omnibuses, and is upon you before you know where you are. That his numbers should be doubled or increased in this way by this Budget reducing the taxation for him fills me with dismay. That is a minor point you will say. That is what I say has been done which had better not have been done.
The other two points I wish to make are things which might have been done and have not been done, where sources
of taxation are available and where the Chancellor of the Exchequer has made no attempt to deal with them. The first is the enormous revenue which might be got out of silver plate. As everybody knows, silver now is one-fifth or one-sixth of its value in 1020. In the reign of Queen Victoria there was a heavy duty upon silver plate, and there is no reason whatever why, when silver is so very cheap, that duty should not be replaced. I would not in the least heighten the price of any of the commodity which is really necessary, but it would strike at a thing which at the present moment is an easy luxury. Everybody is buying silver because it is so extraordinarily cheap. No one is forced to buy silver, but if the old duty were restored, I think it would be found that a very considerable amount of revenue would accrue to the country from simply taking up an old tax which has been allowed to drop into desuetude. This is a point which no one yet has made. Years ago a large revenue was produced from this particular thing, and now that there is a wonderful opportunity for it nobody speaks of it at all.
The second point is a larger and more important one. It is one which I have made before, without much effect, to Coalition Chancellors of the Exchequer, to Conservative Chancellors of the Exchequer, and to a Labour Chancellor of the Exchequer. It is, to tax advertisements. I know that to tax advertisements would mean that you would have to assail many great interests. I know that great protests against it would be raised at once by many interested people. At the same time, one of the things open for attack, which really does not serve any public purpose and is for the most part wholly unnecessary, is the whole system of advertisements. I do not allude merely to the dummy figures that one sees defiling the fields along the roads and railways as one is going out of London. No doubt those might be considerably taxed. No doubt the whole of the posters might be considerably taxed, as they are in most European countries. Those who have been abroad will have noticed the unobtrusive little revenue stamp in the corner of the big wall posters in foreign countries. There is no reason why these sources of revenue should not be tapped in this country.
There is, however, a much bigger source of revenue. Why should not the advertisements in newspapers be taxed? When one estimates the enormous sums of money that are spent in advertisements covering whole pages of newspapers, obtruding tiresomely between the reading material in the newspapers, one asks whether this could not be made to contribute to the revenue of the country. It could be done on the same system that we adopt in regard to the Entertainments Duty. A definite amount could be charged per inch of advertisement or per announcement, and the newspaper would not be able to pass any more than that amount on to the advertiser, just as the person who is running a theatre or a picture palace cannot pass more than the Entertainments Duty on to the people who visit his place of amusement. The amount that might be got out of this tax could be calculated not in thousands but in millions.
There are far too many advertisements in this country, and a great many of them are obviously advertisements that nobody wants. A great many of them are advertisements of things that are positively obnoxious. Whether that be so or not, there is obviously an enormous power of taxation in every form of advertisement. The hoardings along the roads, the figures that disfigure the fields, and the enormous amount of ill-drawn and often repulsive stuff that we find advertised in our newspapers, could be taxed. I do not think that I regard anything as more unpleasant than a great many of the advertisements of underclothing which we find in our newspapers. If the newspapers tolerate these advertisements, let them be fined very heavily for doing so. and contribute in that way to the revenues of the country. I am sure that any Chancellor of the Exchequer who undertook to tax advertisements would arouse against himself a great amount of protest, but he would raise an enormous amount of revenue. He would not be crushing people of the more deserving class but rather the class for which I can feel no sympathy, namely, the millionaire advertiser.

Mr. ANNESLEY SOMERVILLE: The Debate has been remarkable for two speeches from the Liberal benches. The hon. Member for Greenock (Sir G. Collins) has spoken very frankly and has
told the Chancellor of the Exchequer that he is unable to support his Budget. He expressed wonder that we on these benches should in this time of bad trade and low prices support a tariff. Our answer is that it is just because of bad trade and low prices that we do support a tariff. We do so because we find that those trades—I wish there were more of them—that have the advantage of a tariff are the trades in which there is employment, the trades that produce revenue and, in spite of the tariff, we find that the prices of the goods produced by those trades are lower than they were before the tariff was introduced. Having made experiments in those trades, we are quite prepared and are anxious for the opportunity to extend them.
We had a memorable speech from the right hon. and learned Member for Spen Valley (Sir J. Simon). I can imagine the feelings of hon. Members below the Gangway as they listened to that speech, which put to them the alternative that they have to face in voting on this Budget. That speech was answered by a clever speech by the Solicitor-General which, for the most part, was clever special pleading, but it did not touch the big principle that he had to answer. He answered some of the points that were raised by the right hon. Member for Edgbaston (Mr. Chamberlain) and some of the points that were raised by the right hon. and learned Member for Spen Valley. I wish he had answered certain points that are very material with regard to exemptions, on which questions have been directed to him and to the Financial Secretary. What are we to expect with regard to the playing fields of private schools, public schools, colleges and universities? We have not yet had a clear expression of view from the Government Bench in regard to these important matters.
With regard to the playing fields of private schools and the playing fields owned by private individuals, I would ask the Financial Secretary to consider the circumstances. In the private schools we have a system that the country cannot do without. I daresay there are many hon. Members opposite who would have liked to make the whole of our education State education, but if they consider the matter they will find that it is impossible at the present time to do without the
private school system. As to that system, we find that very large amounts of capital are used for the services of education. We find that a number of buildings are used and a large number of men and women are engaged, for the most part well engaged, in doing good service to the community in teaching. We also find that a very large number of open spaces, near to great towns and to small towns, act as lungs for the community, and this Bill is going to tax them. Those playing fields to a large extent have a large site value. I know numbers of them which are used for the benefit of the community. They are open spaces, lungs, that are used by the community and are loaned very often for the benefit of the community. Under this Bill those open spaces are going to be taxed and to be forced into the market. In doing that, you are doing a disservice to the community. I would like a definite pronouncement in regard to that point.
Would it not be possible for the Chancellor of the Exchequer or the Financial Secretary, as representing him, to give us an assurance that so long as those open spaces are used as playing fields, they will not be subject to taxation. A very simple provision could be introduced into the Bill for that purpose. Take the case of playing fields that are owned by private individuals, generous people. I know of several in my own constituency which are placed at the service of the community by private individuals, and they have a considerable site value. The particular case that comes to my mind is that of a beautiful field, owned by a generous man, not very far from his own house. It has a considerable site value and is just outside a flourishing town. He gives the free use of it to the young people of the district, the less well-off members of the community. You are going to tax that field, which has a considerable site value. The owner, being a generous man and fairly well off, may pay the tax and go on putting his field at the service of the poorer members of the community, but he cannot bind his successors. He himself might meet with misfortune, and then the tax would help to force that land into the market. Instead of its being a means of health-giving to the people. it will cease to be a lung and
houses will be built upon it. That is one of the things that this tax will do.
I will put this to the Financial Secretary to the Treasury. He has some knowledge of the ancient places of education. In the course of time—and may it be far distant, because we should not like to lose the Financial Secretary—he will go to the Elysian Fields. Will he ask Henry VI, the founder, the site value of the school yard at Eton? Will he ask Isaac Newton the site value of the great court at Trinity? Will he ask John Milton the site value of Christ's College, and Wordsworth the site value of St. Johns? What will be their answer? Will it not be that the site value is nothing because these places are the imperishable possession of the nation and will never be put to any other use? We want to know the fate of these places. They are being used more and more by the youth of the country. More and more the students at Oxford and Cambridge come from the elementary schools. In my own constituency recently a boy from a secondary school won an open scholarship at Balliol College, and we are all proud of him. Are you going to tax these colleges which are doing such good work for the nation? The universities now get grants from the Universities Grants Committee in order that they may do better work for the nation. You are going to take that back in the form of this tax. I ask the Government to consider these matters and to realise that in taxing these open spaces they are taking far more from the community than they will get as a result of this tax.
What is the big question involved in this taxation of land value? What is the question which hon. Members on the Liberal benches have to face when they go into the Lobby? The question is this: Are they going to vote that the possession of land is wrong and should be penalised? Are hon. Members below the Gangway going to vote for a long step in the nationalisation of land, for Socialism pure and simple? The Government have not the courage of their opinions, because they are not proposing to nationalise all the land at once. It is a sin for a duke to possess land, and for anybody to possess land until its worth comes down to £120. It is a shameless bribe to catch votes. No doubt hon.
Members have seen the cartoon in "Punch" which describes the position accurately. The man who owns a plot of land worth £120 comes trembling before the magistrate, who is the Chancellor of the Exchequer, for sentence. "What is the value of your holding?" is the question, and the reply is "£120." "Fortunate for you it is not £125 or £121. You can leave the court without a stain on your character. If it had been worth £121 I should have had to say that it was a crime for you to possess it and I should have had to penalise you."
This is a cowardly Bill. It is an attempt to introduce nationalisation of land without the courage to acknowledge the principle, and hon. Members on the Liberal Benches will have to ask themselves whether they propose to support the principle of nationalisation of land or whether they will say that land like any other property shall be owned and developed freely. The Bill is a half hearted attempt at nationalisation and if it is carried out as it stands at present will do the greatest dis-service to the youth of this country and to the health of this country.

Sir ROBERT NEWMAN: I should not like to give a silent vote to-night but as I know other hon. Members desire to speak I will be very brief in what I have to say. I really cannot agree with the hon. Member for Windsor (Mr. A. Somerville) that everyone who votes for the Second Reading of this Bill is in favour of land nationalisation or general confiscation. We have to approach the Budget from a general point of view, and if you put the Land Tax proposals on one side then, as far as I can judge, the Budget has received the general approval of the country. Speaking as a Free Trader I support the Budget because it is a Free Trade Budget. There are some hon. Members who take a different view and who would if they had the opportunity have brought in a Tariff Budget. That in my opinion would not have been for the welfare of the country at the present time. I do not, however, want to deal with that particular question. All I want to say is that I am persuaded that there is a growing feeling throughout the country that there should be some taxation on land whose value has been created not
so much by what the landholder has done as by the work of the community. This is not the occasion to go into details, when we come to consider the Bill in Committee will be the time to see what we can do to remove what may be injustices on one side or the other. I have never been a strong party man and I think that on a question of this sort we should forget a little our partisanship and try to see whether we could tackle this question not from a political and party point of view but from the point of view of the welfare of the nation as a whole.
One thing I would say with all respect to the Chancellor and those who are always talking about the community having a particular claim upon landed property. I would like to make my humble protest against an argument that I hear constantly—that the community have a particular claim upon the land because they have built up its value. I am too democratic to acknowledge that at all, because I am fully convinced that there is no form of property whose value has not been built up very considerably by the work and help of the community. The argument is a two-edged sword, when we lay such great stress on land, as if it were the only thing to the wealth of which the community has added. We hear economy talked about much. It may horrify some people, but personally I am of opinion that as time goes on we shall have to spend more money on social services. But it would be a fatal thing, when the time comes, if people could argue that the community have built up the value of only one third of the wealth of the country. One of the great claims for social reform and social services is the argument which I have often used—that the wealth of the whole of the country has been built up, by personal effort, I know, but supported by the work and assistance of the community. If we say anything in this Debate or elsewhere that will weaken that position, if we say that the value of the land and of land only has been built up by the community, it will be a very nasty weapon to be turned against us or anyone who in years to come may be compelled to advocate considerable expenditure upon social and other services.
It is going a little far for anyone to assume that every vote given in favour
of the Second Beading of the Bill is given merely because of a wish to confiscate land or anything else. I think that a great number of the votes given for the Second Beading to-night will be given merely because, taken as a whole and considering all the circumstances, the Budget is a good one. The question of the land taxes is very important and it will have to be thrashed out in Committee. If at subsequent stages we can approach what is a very difficult subject with as little party bitterness as possible and with a desire as far as possible to attain what I believe is the great wish of the majority of people, it will be all to the good. The desire of the great majority is that there should be no unfair taxation of those who invest their money in land, but that at the same time where the community has built up and created a great increase in the value of land, there should be some means by which the State can obtain a return of some of the wealth that it has created.

Colonel WEDGWOOD: I cannot bear hearing hon. Friends of mine sitting on different sides of the House criticising the honesty and justice of the principle underlying this Budget. I am sorry that the hon. Member for Windsor (Mr. A. Somerville) is apparently stirred by a sense of injustice. I ask him to believe that hon. Members on this side who are supporting the Land Value Tax are honestly supporting it with the conviction that it is a more just system of taxation than any other. That is its whole essence, looked at from the ethical point of view. The hon. Member has been an instructor of youth, and he must look at these things from a moral point of view. Surely the State has a greater moral right to take back year by year a payment from the landlords in return for benefits conferred upon those landlords in maintaining the value of their land. The hon. Member will see at once that if a water rate is charged according to the amount of water consumed it is a perfectly just charge, but if on the other hand it is based upon the income of the person, whether he consumes much water or little, it might be regarded as an unjust charge. An Income Tax based upon what a man produces could be charged with injustice much better than a tax upon the value of land which is
in effect a recovery by the community of part of a value created and maintained by the community. If he thought that that land value was maintained by the community, not by the expenditure of rates and taxes only, but by the demand of the community for land on which to live, he might say that it was an unpleasant tax but at least it was a just one.

Mr. A. SOMERVILLE: Is not the value of everything dependent upon the community and produced by the community? Is not the value of the brain of the right hon. Gentleman dependent upon the community?

Colonel WEDGWOOD: That is an argument which is used by both extremes in the House. Hon. Members from the Clyde believe with Louis Blanc, Le propriété c'est le vol, "Property is theft." The real difference is this: The value of a suit of clothes depends on the labour used in making that suit. The value of a house depends on the value of the labour put into that house. The price of a house or of a suit is determined by the cost of production.

Mr. LEIF JONES: Is not the value of everything settled by how much you can get for it?

Colonel WEDGWOOD: Certainly. The value of a suit of clothes or a house is the price that a man can get for it—the price in competition with a dozen other people producing the same thing. Therefore, it is ultimately fixed by the cost of production. That is the essence of the thing. Land does not depend on the cost of production in the least. It is not produced. Land value depends on the demand from the community for the right to live on that land. If the community doubles in number in any district the price of land is bound to rise. If the population is reduced by one-half in the next 20 years land value will come down, because the demand will not be so great. There is an essential difference between the value of land and the value of what is rightly called property. I do not call land property at all. I call the ownership of land a privilege. It is the privilege of saying what anyone must pay before being allowed to use that piece of God's earth. Like other privileges I want to see it reduced.
I am certain that the hon. Member for Windsor and the hon. Member for Exeter (Sir R. Newman) would have supported the great Reform Act of 1832, which abolished some 250 rotten boroughs. Those boroughs were bought and sold in the open market. Sometimes as much as £10,000 was paid for the privilege of returning Members of Parliament for such a borough. By a stroke of the pen, without a penny piece of compensation, in 1832 the whole of that property was struck away. Was that property or was it privilege? I maintain that, there, too, the House was justified in abolishing that particular privilege without compensation, because it was not property, it was not the result of any man's labour. It was the result of bad laws. The abolition of the Corn Laws in 1846 was on the same basis. There, at one stroke of the pen, a large part of the value of the agricultural land of England was destroyed, but it was not a case of destroying property. It was merely a case of destroying the privilege of the protection of the Corn Laws which sent up the value of the land so that tenants had to pay more for the land which they cultivated.
I have been drawn to some extent from the main basis of the Bill, but I wish to establish in the minds of hon. Members opposite the certainty that we are perfectly honest in advocating this tax as a juster tax than many of those which are levied to-day. Incidentally, it is an expedient tax because it cannot be passed on to industry. We all know that taxes on capital are passed on, but this one cannot be passed on, and therefore it is more expedient. I would never advocate any measure, merely on the ground that it is expedient or in the public interest, and in this case it is quite sufficient to base oneself on justice, and to demand the restoration to the State of part of the value created by the community. It is only a matter of one penny in the pound, and I do not think that even if it were the rankest injustice there would be a great outcry about it. But at the back of everybody's mind is the feeling, "If the principle be admitted that the State can recover part of the value which it creates, what further steps may not be taken in the same direction?" I hope that, later on, there will be many steps in the same direction. It is a principle of enormous importance to the democracy of this country that we should
have the right to recover that which is our own.
This is not, I ask hon. Members to observe, nationalisation of the land. When the Labour party propose the nationalisation of the land they do not mean to confiscate. They mean to pay for it. This Measure is not the nationalisation of the land, but it is the beginning of the nationalisation of economic rent—a perfectly just thing. I say nothing about nationalising the land and paying for it, but I do say that this is an essentially good proposal and can be supported by every good Liberal on sound principles. I was horrified to listen to the speech of my right hon. and learned Friend the Member for Spen Valley (Sir J. Simon). I have heard him speaking in this House—I was almost going to say for centuries—and he has always impressed me with the honesty of his opinions. To-day he was making a cheap personal attack upon the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), a thing which he has never done before in public. He knows well enough that hard cases make bad law, but I do not see why a difficult position in the Liberal party should make a bad Member of Parliament, and he became one when he made that speech this afternoon. The right hon. and learned Gentleman introduced a Bill in 1925 and drafted it with great care. He was enthusiastically in favour of the principle of taxing, not increment values, but land values, and yet he comes out to-day and tries to pretend to the House that he is a reincarnation of Harold Cox. But as a reincarnation of Harold Cox he failed signally. There was no attempt at Liberalism in his speech, and I hardly think that the case which he made out against the Bill will cut much ice, when it is realised that his own Bill was built on exactly the same lines.
9.0 p.m.
As to the Bill before us, I would point out that the learned Solicitor-General and other speakers on behalf of the Government have answered the questions put from the other side of the House, but they have avoided—I will not say they have evaded, but they have failed to answer—any questions put from their own side. Now the object of those people who are enthusiastic supporters of the
Government in this Measure is to get a complete valuation of the land of this country. We have no interest whatever in a partial valuation. To begin with, if we are going to the country on this question we must be able to advocate the principle of a change in the basis of rating in our towns, rather than an additional tax on the people. It is always difficult to support, in public, an additional tax. It is perfectly easy, because it commends itself to everybody's intellect, to advocate a change in the system of rating such as that carried out in most of our colonies. Unless we can get a complete valuation, we have no assistance in getting that change of rating put before the country or put into practice. Therefore, I hope that we shall have a complete valuation in this case, so that local authorities may also have something to which they can appeal in the case of the compulsory purchase of land.
I had hoped that we might get our roads made cheaper—our great new bypass roads—if we had some sort of record of the value of land. I had hoped that we could get playgrounds for our schools, and even allotments for schools in country districts, and bring about the additional intensive cultivation of the land in all sorts of ways, if we had such a valuation. There is a Bill going through another place asking for the better use of land. There is the Prime Minister writing to our candidate at Rutherglen making it clear that what the Government demand and what the Labour party want is the better use of the land of the country. We cannot bring about that better use of the land unless we have a valuation showing what is the value of the land when public authorities or even private persons seek to get it in order to use it better than it is being used at present. Therefore, both for the purposes of purchase and for the purposes of a change in rating, it is essential that we should have a general valuation, and I ask hon. Members on this side who will, I hope, support me later on, when it comes to amending this Bill, to read the text of a, Bill introduced by the Labour party last year. Only a year ago they introduced a Bill to value the land of this country, and, under the provisions of that Bill, we were to get a complete
valuation. I do not say that it would have been a perfect valuation, but at any rate it would have been complete. Such a valuation would have provided also for agricultural land. It would have given us the value of the land both in the towns and the countryside, and it did not exempt sporting rights. Incidentally, may I ask by what right is it suggested that sporting rights should be exempted while apparently a tax upon playing fields is to be included? Are the eloquent words of Francis Dyke-Acland on stag hunting to be echoed by hon. Gentlemen on the Front Bench in favour of pheasant battues?
The main point is that in the Bill of last year to which I refer, we provided for a complete valuation but in this Bill we are not getting a complete valuation. I have down quite a small Amendment which the hon. and learned Solicitor-General can perfectly well accept which will put all that right. I hope he will look upon that Amendment with a favourable eye, and that he will not be too much swayed by the opinion of the drafter for the Bill. I do not see the right hon. Gentleman the Member for Carnarvon Boroughs in his place, but he knows what happened in 1909. In 1909 the right hon. Gentleman's heart was in the right place, but, above all, the Treasury's heart was in the right place. Chalmers was there then, but I do not know what it is now. But the draftsman of the Bill saw to it that the thing went wrong. Therefore, I say, beware of the draftsmen of any Bill. They love complication and they hate simplicity, and they do not understand the principle which is behind this Bill. The first thing, therefore, is to get the valuation universal—I do not say at once, but gradually universal. The second thing is, for goodness sake let us have a valuation which will stand the Law Courts and stand muster.
The hon. and learned Gentleman has done us very well over this Bill, and has shown a wonderful grasp of the situation. I ask him to observe that in this Bill you are exempting from valuation at least nine-tenths, and possibly 99 per cent., of the area of the land of Great Britain. I will point out how you are exempting agricultural land where-ever the cultivation value is more than the land value. That depends in the
first place on your definition of land value and of cultivation value. The land value is the land stripped, without any sporting rights, and without any sand or gravel; it is almost bare land, but not quite. The cultivation value is something very different. It is what the land would take in the open market if it were subject to a restrictive covenant preventing its use for anything except what it is being used for at the present time, plus the farm house and the farm buildings. I am afraid that the cleverness of the landlord's agent will inevitably make the cultivation Value considerably more than that stripped land value. If there should be any doubt about the sundry definitions in the Bill all can be put right by the landlord making restrictions.
I have pointed out that the real snag in the Bill occurs in the First Schedule on the question of what restrictions in the use of land are to be taken into account in valuing the land. For instance, if the land is part of a town-planning scheme, and the land to be valued cannot be used for anything but an open space, then that land under that restrictive covenant will be valued as for its present use as an open space or agricultural land, or a golf course, or whatever it may be. That is all right. I have no objection to that sort of restrictive covenant made between a landlord and a local authority, which imposes restrictions in the public interest, being included. It is unfair to tax a man on the value which he is legally prevented from obtaining. But that is a different thing from allowing a landlord a reduced valuation because of a restriction that he has made, or which his predecessor in title has made, in order to keep up the value of adjoining property. If that restrictive covenant does really reduce the value of that piece of land, it is certain that it has been put on in order to keep up the value of some other piece of land. Such a restriction may be that land must be used for houses worth £1,000; a poor working man must not live there. That is done to keep up the value of the land.
Worst of all, anyone reading this Bill, if it passes as it is at present, will see that it is possible to keep land out of the ambit of taxation by negotiating an
agreement with anybody restricting the use of that land until both parties to the agreement decide that the agreement shall come to an end. It will be restricted until the demand of the community for that land has sent it up to such a price that it is worth while breaking the agreement; until, indeed, it is worth putting up a notice board saying, "This valuable land is for sale," and slashing the agreement. When the ripening time is at an end, you can afford to pay for a year or two until the builder relieves you of it. That is not cricket, and I am certain that it is not intended by the Government. Unless there is in the definition of restrictive covenants something to prevent that sort of things going on we shall have in future a state of affairs worse than we have to-day.
Our whole object in this Bill is to make land, particularly land for building, cheaper so that the people who want houses will be able to get them more easily, not only by the local authorities but by private people building houses. We want to increase the supply of building land. I put out one danger signal about this talk of ribbon houses. It has become the fashion now to say, "These ribbon houses are spoiling England." I want to know where our poor people are to be allowed to live. Are they only to live in the ghetto or are they to be allowed to live in the country? What is the objection to ribbon houses? It is that they are houses of poor people. [HON. MEMBERS: "No!"] Then what is your objection to them? It is because they do not look so beautiful. They are houses built at a price which people can afford to pay, and they are along a road so that people can get to them and do not require to develop an estate at the back and to build costly roads. The ribbon houses are the houses of the poor, and when hon. Members opposite, and some on this side of the House, jeer at ribbon houses, they are jeering at the new ambition of the working man to live in the country instead of having to live in the slums. I want more ribbon houses and I object to people being told that they are Philistines and outcasts because they choose to live in the country and put up a bungalow which is not artistic according to the latest canons of the Royal Academy.
We in this House have no right to make it more difficult for people who want to get land in the country on which to put their houses or of people who want to buy a country bungalow. Therefore, I view this restrictive Clause as especially dangerous, and I hope that the Government will see to it that no increased difficulties are put in the way of the rural housing of town workers. I want to emphasise the fact that that restrictive Clause lowers land value till it is less than cultivation value. I will add one other serious point which I am certain has not escaped the notice of the hon. and learned Gentleman. That is the fact that you are valuing complete units. I will take a road three miles out from the great town. On one side of the road there is a big farm of 200 acres with a short frontage on the road. That frontage is worth anything from £200 to £400 an acre for housing. The land along the front of the road is not valued separately, and, as it is only a small proportion of this big unit which has this high value, as compared with the cultivation value of the 200 acres, it is inevitable that this large unit should escape the tax. There will be no margin between the cultivation value of the large unit and the land value of the large unit including the field with a frontage of 200 yards on the road. On the opposite side of the road there will be a small unit, perhaps 10 acres of land. The frontage there is as valuable as the frontage opposite, but because in the small case the frontage bears a much larger proportion to the value of the whole unit as compared with the proportion in the large case, that man will have to pay tax. He pays the tax simply because of the size of the unit.
As a large unit will escape, there will be a tendency for large units to be created in order that they may escape, and we shall, without intending it, have encouraged the development of large farms, which is just the sort of thing we want to get away from. [HON. MEMBERS: "Where is Addison?"] I want to have more small holdings, more allotments, more people working for themselves rather than for a master. Therefore, this tax exempting large units will inevitably tend towards the development of large units, although that difficulty would be
put right if the Government will agree to my Amendment. I am quite certain it would receive the unanimous support of the Liberal and Labour party, because we want to have as few hard cases as possible and to have elementary justice as between one man and another having land on different sides of a road. If the large unit tends to escape because the cultivation value is larger than the land value, we shall be opening the door to a collusive evasion of the valuation.
That leads me to this proposition, that we shall not get more than 1 per cent. of the area of the land of this country valued under this Bill. I take my own constituency, which naturally I know best. There are two urban districts there. I do not believe that in the whole of the Audley district, where the mines have been closed down and the people are almost bankrupt, where the local authority does not know where to turn for money, there will be 100 acres which will pay tax under this scheme. Of what service will it be to the local authority to offer them this valuation, to say to them, "Here is a valuation, now you can levy rates on it"? The valuation will be ridiculously incomplete. As to Wolstanton, I do not believe that under the Bill as it stands we shall get one-half of the land valued.
Take the case of my own borough of Newcastle-under-Lyme—still happily free from the tyranny of Stoke-on-Trent, and a thoroughly soundly conducted borough, living nearly up to its boundaries. We shall be presenting that local authority with a valuation roll—and they will use it, if they get it—which will not include more than two-thirds of the agricultural land in that borough. Why? Because the Bill exempts all land owned by the municipality from valuation and from tax, and like a sensible authority they have nationalised—bought, paid for it, of course—about one-third of the agricultural land in that area. So that valuation will not be any good either—[Interruption.] The hon. Member for Burslem (Mr. MacLaren) has reminded me of another way in which the valuation will be incomplete, but I do not think it can be right. I do not think they will supply the local authorities with a valuation which does not give the value of any house under £120. There are many people who own a great many houses.
Individually, the land value of each of those houses will be less than £120, but because a man owns many of them they must be valued, and according to the Bill it is only when the man appeals and says that his whole property is worth less than £120 land value that he will get a remission. He cannot tell whether he is entitled to a remission until he has received his demand and notice, and therefore I think the valuation of these small properties will be included.
The incompleteness of the valuation is the most serious thing. We must have a valuation supplied to the local authorities, so that they may have some guidance as to what to pay for land, and so that they may have the opportunity of changing their system of rating and levy on land values. When we come to the valuation itself, we may get a valuation which will make the whole scheme ridiculous. The exception of minerals, including clay and gravel and sand, will make the value of land a hypothetical value, and the lawyers, in spite of the efforts of the Solicitor-General, will make the Act ridiculous. After all, land is bought and sold to-day with the subsoil included in the price. When you buy land you buy the sand and gravel and clay underneath. I am not talking about coal and iron, but in the ordinary case minerals are included in the transfer. Any valuer estimating the value of land will take into account the price at which it has changed hands in the past—they have the records in Somerset House; but that record is not a record of the value of the land without the earth under the surface, and therefore the valuers will have to make a hypothetical valuation. It will be a valuation which is far more difficult to maintain in a court of law against the demands of the owners for a reduction in value. It will be much more difficult for the valuation to be an accurate valuation.
There is just this to be said for the Bill and for this valuation, which I regard as more liable to be destroyed in the Law Courts than the land valuation of 1909, that it is not the draft of hon. and right hon. Members on the Treasury Bench, but is the draft of the valuers themselves. I am certain that this is their expert work. They have committed themselves to this, and it will take a great deal of pressure on the part of
right hon. and learned Members on the Front Bench to get them to change a comma. In that case, they have fortunately committed themselves to making a success of it, and that will almost be worth the blunders in drafting, because, after all, the success or failure of this plan must depend in the long run on the valuers. Somerset House have to make the valuation. They think they can do it, and we can only hope that they are right. If they cannot do it on their own valuation, they are not quite playing the game. I hope we shall see that the valuation is made to conform to our ideas as to what is to be taxed, as to the publicity and the usefulness of the valuation, and as to the determination of this House to see a beginning of that just recovery by the community of the value which is properly the value of the community.

Sir DENNIS HERBERT: The right hon. and gallant Gentleman who has just sat down is always worth listening to, and in these days we are no longer afraid of anything that he has to say to the House. He has described himself as a philosophic anarchist, but he has changed in the last years. His philosophy has turned to philanthropy and his anarchism to a tendency not to obey any laws which are not convenient to him. If he became the dictator of this country, we should not fear that he would upset our land system: for any reforms he wanted would have to be perfect, and he sees all the blemishes. It will be far beyond his time or the time any of us will have upon this earth before he can abolish and remove the blemishes, and so there would be no legislation passed in this country while he was in that position.
I should like to turn for a moment to the other part of this Finance Bill which deals with the finances of the year and to make one or two observations in regard to the Budget generally. The President of the Board of Trade claimed, as the Chancellor of the Exchequer did, that it was an emergency Budget and for the purpose of an extraordinary time, and that that was sufficient cloak for its failings and faults. Nobody knows better or has expressed more plainly than the Chancellor of the Exchequer and the President of the Board of Trade the seriousness of the financial position that
we are up against. The hon. Member for Ince (Mr. G. Macdonald), speaking some time ago, questioned whether there was a serious financial position at this time. Some of us may have felt a certain sympathy with, if I may so say without offence, the elementary ideas at the bottom of his speech. But the whole of it was vitiated by the fact that he does not realise what the leaders of his party do realise, the really serious financial position we are up against.

Mr. G. MACDONALD: I hope the hon. Gentleman will not misrepresent me. What I said was that while the financial position was so bad, it was felt worst by the poorest classes of the country.

Sir D. HERBERT: I did not misunderstand the hon. Gentleman but I think I am right in saying he did not recognise that there was a serious financial position in the sense meant by the Chancellor of the Exchequer when he warned the country about it. The Front Bench know that position, but they have declined to face up to it and have treated it as funks instead of facing it. They have excused their misdeeds and failings in this respect by pleading the emergency of the times. They have treated the position with neither boldness nor frankness, but as funks. When funks try to deal with a position, they invariably deal with it worse than if they tried to show a little pluck and bravery and boldness in facing it.
What have they done? They plead rightly that to put an extra 6d. on the Income Tax would be a mistake, because they see that it would probably result in the end in a reduction in the net yield of the tax, and yet what are they doing? Instead of putting that 6d. on the Income Tax as, if they had a little bravery as well as stupidity, they might have done, they have put an extra 1s. 1½d. Income Tax on to that one class of Income Taxpayer which feels most the burden of any increase at the present time—the one class to whom the burden of Income Tax is most to the disadvantage of the country as a whole, namely, those who are earning money. There is no serious question of mathematics in this, and it is quite useless for the right hon. Gentleman to say that he is merely taking back a concession made a few years ago. It is no
use to say that he is merely asking people to pay something a little earlier than they would have done before and that it is only a matter of the interest on the money. It is no use right hon. Gentlemen trying to protect themselves by referring to what the right hon. Member for Epping (Mr. Churchill) did. I do not care whether that is to be defended or not; I am speaking of the conditions in the parlous times in which we find ourselves now. The literal fact of the matter is—and it cannot be denied or altered by any juggling with figures—that this particular class of taxpayers has to pay this year 5s. 7½d. instead of 4s. 6d.

Mr. W. GRAHAM indicated dissent.

Sir D. HERBERT: The right hon. Gentleman shakes his head. If I am wrong, he will correct me.

Mr. GRAHAM: The hon. Member assumes that they are all liable at the standard rate, but that is very far from being the case.

Sir D. HERBERT: I do not want to go into too much detail. I am speaking now broadly of businesses which are earning money in this country. Of course, I know all about allowances and the first part of Income Tax being free of charge and so on, but my point is that when you come to the standard rate—and the right hon. Gentleman cannot deny it—this class of taxpayer, who is liable to pay the standard rate, has to pay 5s. 7½d. this year instead of 4s. 6d. Therefore, I say the right hon. Gentleman is increasing the tax on that class of taxpayer where the burden is most to the disadvantage of the country. He is increasing the tax on them by 1s. 1½d. in the year, whereas, if a little more boldness and openness as well as stupidity had been shown in tackling the position, he would have put an extra 6d. on the whole of the Income Tax which would have produced much more and have been less a burden on that particular class of Income Taxpayer.

Mr. LEIF JONES: The result is that they will pay only 1s. 1½d. in July instead of 2s. 3d.

Sir D. HERBERT: Next year they will pay 4s. 6d.

Mr. LEIF JONES: How does the hon. Member know that? It depends entirely on the action of this House next year whether they pay more or less.

Sir D. HERBERT: The hon. Member has answered himself. He does not know either what they will have to pay next year. But assuming that the tax remains the same, the extra payment this year does not let the taxpayer off anything next year. Does the hon. Member deny that?

Mr. LEIF JONES: The hon. Member does not realise the position. If the matter had not been disturbed, the taxpayer would have had to pay 4s. 6d. this year and 2s. 3d. of it in July. Under the present arrangement, they will pay 1s. 1½d. of that 2s. 3d. in January and the other 1s. 1½d. in July. What my hon. Friend forgets in his argument is, that this money is due to the Chancellor of the Exchequer from the moment that the House passes the Income Tax, and that all that happens is that Income Tax payers are paying six months sooner than they otherwise would. All that they lose is the interest for six months.

Sir D. HERBERT: I am not forgetting anything. My hon. Friend is repeating what I said in my much simpler statement. Assuming that the standard rate of Income Tax remains at 4s. 6d. for another year or two, this class of Income Tax payers is to pay 5s. 7½d. this year, and it will still pay 4s. 6d. next year. That is the thing the Income Tax payer will feel.
We have been asked what we would have done in those circumstances. It is not the time, and it would be idle, to tell the Government what we would do, because they have told us already that they are bound by certain shackles, which prevent their doing things which would have been included in our plans. There is another alternative that they might have taken on their own lines, following what they have done in other difficult positions. They might have treated this finance position in the same bold and masterly fashion in which they have treated the great problem of unemployment, by passing a merely formal Finance Bill and setting up a Royal Commission to inquire into the serious financial position. The fact of the matter is that this Finance Bill, so far as it deals with the finance of the year, is one that has shirked the position, and, in addition, has muddled it, in so far as it has dealt with it at all.
The right hon. Gentleman the President of the Board of Trade said that there had not been any criticism up to the time when he spoke about the treatment of the dollar exchange reserve. I do not know whether anyone has spoken about it since while I have been out of the House, but the Government's treatment of the dollar exchange reserve is one which I am perfectly certain the right hon. Gentleman will find it very difficult to defend, against those who are experts in matters of that kind. It may be perfectly right, and I am prepared to admit it, that the dollar reserve fund is not wanted for its past purpose to the same extent as it has been wanted; but to use for meeting the expenditure of the year a fund which, if any fund at all was earmarked as capital, that was, is thoroughly unjustifiable.
I would like to say a word or two about the other part of the Bill, dealing with the Land Value Taxes. It is clear that those who are in favour of this method of a flat tax (not a local rate) on the site value of all land, developed or undeveloped, regardless of whether there is increment or decrement, or of whether the value remains the same, are taxing one form of property to a greater extent than any other form of property. That is not genuine taxation at all. It is in the nature rather of a penalty on those who choose to invest their money in a particular form of investment. Surely you must regard the question of those who are to be exempt from this penalty on rather broader lines than on the ordinary lines of taxation, and not in the way in which the learned Solicitor-General tried to defend certain charitable bodies and others not being exempted, despite the fact that they have invested their money in land. Investment in land has been one of the most useful and proper forms of investment for those institutions, which every one of us wishes to support, and which help the crippled, the sick, the aged, the poor and the youth of this country. Surely if those old foundations have been encouraged, as they have in the past, to invest in land as the most permanent form of investment, they deserve to be exempted from this new penalty on the holding of land, whether they hold the land to use it for their own purposes, or whether it is land which they have purchased for the purpose of investment and for endowment for carrying on their work.
When the right hon. Gentleman the Prime Minister goes down to Chequers on a Saturday afternoon, I would like him to go a slightly longer way round, by the Watford by-pass road, and, when he sees the young men and young women who have been working at the desks and counters in the City of London and in the West-End on their sports grounds, to think whether he is going to increase his popularity by his new tax. Let him go a little further, and drive past such places as the great Masonic School, the Royal Caledonian School and the London Orphan School. There is not an hon. Member who would not support those institutions. Let the Prime Minister consider whether bodies of that sort ought not to be exempted from such a penalty as this. When we come to the Committee stage of this Bill, I hope that the Government will give the most favourable consideration possible to trying to relieve from penalty all bodies where the land is owned for the good of the community, or for the good of many members of the community, and is not used for private purposes or for private gain.

Mr. MAXTON: The hon. Member for Watford (Sir D. Herbert) is one of the few Members taking part in this Second Reading Debate who have discussed the Finance Bill in a Second Reading way. It seems to me that most of the speakers have been discussing Committee points on the taxation of land values. The hon. Member for Watford described this Budget as one produced in a spirit of funk. Naturally, sitting on this side of the House, I cannot go so far as that, but I certainly feel that it has been produced with undue discretion. I think the essential point that this House has to face, now or in the very near future, is as to whether the country is in a serious financial position or not. The hon. Member for Watford says that we are in a very serious financial position, and he takes my hon. Friend the Member for Ince (Mr. G. Macdonald) to task for saying that we are not.
I want to see this country in a serious financial position. My political philosophy has taught me to believe that, with the continuation and development of capital, a stage would be reached when the capitalist system of society would
not work, and when financial and industrial collapse would be imminent. I have studied with the greatest care all the signs and indications open to the ordinary man, in the hope that I would find that that time were here now, and I say with all regret, having examined every indication that is available to me—there may be others available to the Treasury that are not available to the common man—having examined all those symptoms by which one could measure the financial condition of this country to-day, there is no evidence at this moment of financial collapse, there is no evidence of financial suffering by any section of the community, no evidence of financial restrictions, unless in the homes of the working-classes.
I challenge Members of this House to examine the Statistical Abstract obtainable at the Vote Office, to look over the huge mass of financial facts and figures that is given there—admittedly not up to the last 24 hours; there is a certain time lag—to examine the returns of the Income Tax Commissioners for all the years, and all the outward signs and symptoms, such as bank deposits, savings banks, insurance companies' statistics, statistics of new companies floated and the capital involved, statistics as to bankruptcies, which are quite insignificant both as regards number and as regards the money involved; and I say that in the whole capitalist system of this country there is absolutely no evidence that the ordinary man in the street can find of financial insecurity in this country.
The only thing that we can see, and see very definitely, is that the financial position of this country is stronger than it has ever been. The figures are a little lower than they were at the peak period of inflation in this country, but, comparing these figures with the commodity prices of to-day, the financial position of the country is stronger than it ever was, and is going up; and the standard of life of the working-class is going steadily down. Hon. and right hon. Members opposite come into the House and talk—though not many of them come in. I have been here all day. and the average number of hon. and right hon. Members of the opposite party who have been present has not exceeded 11. This is to face a great financial crisis. I am not
insisting that hon. Members should spend all their time in this Chamber. I believe that there are, on most days, more useful ways in which a Member can spend his time; indeed, to-day has been one of them. But, if hon. Members both above and below the Gangway opposite believed that they were really facing a great financial crisis, they would be here—

Major-General Sir ROBERT HUTCHISON: Does the hon. Member know that upstairs we have been asked by the Government to sit on a Committee this afternoon, although we protested again and again that we ought not to be sitting on a Committee when the House was sitting?

Mr. MAXTON: That may be true, but, if the hon. and gallant Member will allow me to give a little private information, on the one occasion when I was out having some food I met him in the corridor; and, if he will allow me to go a little further into the privacies of private intercourse in this House, he was not discussing with me the financial crisis, but how I could improve my golf. [Interruption.] I do not know that I should be allowed to carry this interlude to an unlimited extent, but I would say, for the hon. Member's satisfaction, that I propose to try out the information that the hon. and gallant Member gave me, although in my own heart I feel that it is, like other Liberal proposals, a mere palliative.
I think I am justified in saying, therefore, that hon. and right hon. Members opposite do not believe that they are up against a financial problem. If we were, as I hope we will be, up against a financial crisis, then serious steps would have to be taken, and in my view my right hon. Friends have been wrong in postponing, until the arrival of a crisis, the taking of serious steps, instead of exercising wise statesmanship and taking the steps now, while there is still time to save the country from all the trouble, distress, suffering, inconvenience and stoppage that will necessarily arise if we allow the crisis to come and then begin to think out how we can meet it. I regret very much that my right hon. Friends have, first of all, accepted the view that there was a financial crisis.
I do not know who are the strong men at the Treasury, or at the Bank of
England, or in other financial circles, who year after year, whatever political party may nominally be in power, persuade the Chancellor of that political party to accept the philosophy which they themselves hold, and to bring forward similar devices for meeting the situation which has to be faced in the coming age. Why should the Socialist Government accept this view which has been traditional at the Treasury, that the nation should only budget to meet its annual expenditure? Why should not the nation budget for a surplus so that, as a nation, it would have something in hand for a rainy day? If one examines the position of the National Debt, every Chancellor of the Exchequer for over a century has been struggling in each year to reduce the National Debt and, if you look at the figures, you will see that it is slowly and surely climbing steadily up. There are occasions when there is a slight drop. Perhaps steadily is too strong a word for a five-year period, but for a 100-year period, if a graph were drawn showing the movement of the National Debt, there would be one or two small V-shaped depressions but the steady tendency of the graph would be Heavenwards.
10.0 p.m.
A very common phrase used in our Debates in criticising the action of Governments is to say that no business man could run a business in this way—if a business man did this, that, or the other he would be in the bankruptcy court in a month. I put it to the House that, if a business man did not each year put something to reserve for contingencies, and lay something aside for renewals, depreciations and so on, he would be regarded by his fellow business men as a very imprudent and profligate business man. Yet these same business men come to the House year after year and insist that this nation, as a nation, shall merely budget to bring in the reveue it requires for absolutely essential national expenditure. My right hon. Friend should this year have budgeted deliberately for surplus, so that, in the event of crisis coming along, the nation, as a nation, would have had some resources which would have enabled it to step into the industrial and commercial morass and try with its own resources to bring order out of chaos. The nation is anxious that the iron and steel industry should be reorganised, anxious that coal should be reorganised, anxious that cotton should be
reorganised. But what have you to do as a nation? You have to go out and persuade, and coax, and coddle financiers to put forward money for the reorganisation of this industry in which the existing money has been lost. You have to appoint highly paid organisers to go out among the coal-owners to persuade them to coalesce. As a nation, you have no power to reorganise any one of your big essential industries, those that are causing us all our trouble. But you have no resources, and you must content yourself with trying to persuade private interests to be good enough so to unite their work together that their operations will be carried on in the interests of the nation, and not against the interests of the nation. Again, I urge on my right hon. Friend that a surplus should have been budgeted for to meet the needs of the only section of the population which is suffering now, namely, the working-classes and the unemployed.
It is an extraordinary thing that, in all the Debates on the Budget, the whole tenor of the argument on the opposite side has been: Do not touch the landlords. Do not raise any more revenue from the landlords. The right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) read a touching letter from a spinster with a small bit of land. Poor old spinster! She is dragged out periodically whenever it suits our purpose. I regretted, while the right hon. Gentleman was reading it, that, when the Tory Government were introducing the petrol tax, I did not get up and appeal for the poor old spinster with her Baby Austin, her one little joy. She could keep the baby, she could wash the baby, she could run the baby. But, when the petrol tax was put on, that was the last straw that killed the baby. I hope hon. Members opposite will keep that out of their arguments in future, but that, on the next occasion when an appeal is being made for better old age pensions, when an appeal is made to save the nation at the expense of the unemployed, they will remember the spinsters who are aged and the spinsters who are unemployed, and I hope they will not shout about the terrible anomalies of spinsters living with their parents being allowed to draw the dole,
and what a terrible abuse that is of public funds.
I hope, whatever the House of Commons does in the months in front of it, it will not decide that the way to escape from the country's financial difficulties, which in my belief are entirely illusory, is by taking shillings away from the people who have so few just now. It is true that the Unemployment Insurance Fund is not on an actuarial basis. Is that the fault of the unemployed? If it is the fault of anybody, it is the fault of the right hon. Gentleman sitting on the Front Bench who assured me with all that sure-as-death style that nobody can adopt better than he, when he was introducing his Unemployment Bill, that he had received sound advice from the experts that the numbers were going to be down to 600,000 within a few months, and that he was safe. [Interruption.] Oh, yes, I have this in my mind quite clearly. I know quite well, for I remember being suspended over it. I know, and if anybody has responsibility for that huge debt to-day it is he who is responsible, and not the men who are unemployed. If anyone should be asked to pay the penalties it should be he, all Members of this House, all Members of Governments who ought, by this time, to have made some arrangement by which the available surplus of the nation could have been used in some intelligible way. I hope that, because we have failed—we, all of us, everyone of us who has been here for any reasonable period of time is responsible for the 2,500,000 unemployed—we shall not make the man who has suffered all that time suffer further for our failures, our weaknesses and our defects.
I hear remarks about the demoralisation that takes place of people getting allowances for which they have not worked. I noticed the other night a paragraph in an evening paper which spoke of the tremendous flow into gilt-edged securities and the great disinclination on the part of wealth to go into industries. It is merely an indication on the part of capitalists of this country that they prefer to draw Government doles rather than take industrial risks, or that they prefer leaving their money in the hands of a Socialist Chancellor of the Exchequer rather than in the hands of their own capitalist colleagues. If dole-
drawing demoralises, then I would consider first the problem of how to prevent the demoralisation of those who are living on interest drawn from gilt-edged securities rather than consider the demoralisation of those who are drawing a miserable 17s. a week. The whole lot of this talk reminds me very much of Charles Dickens. I can remember, as I suppose most middle-aged people who were brought up on Charles Dickens will remember, how our hearts were wrung over poor Oliver Twist in the workhouse when he went to the workhouse master and asked for more, and how shocked we were at Bumbledom being horrified at a pauper daring to want enough to eat. We said, "Oh, these days are all gone now. We live in different days from those of Dickens. Bumbledom is dead. No more do we think that a poor man has no right to a full stomach."
I put it to hon. and right hon. Gentlemen opposite, and to all those, wherever they sit, who are talking about removing irregularities and stopping abuses, if there are abuses, of the present unemployment legislation, that that is an administrative job for the Department concerned, or a case for the Law Courts. The present legislation dealing with the unemployed people is harsh enough, mean enough, difficult enough and sordid enough, without making it any worse, and when people, in whatever part of the House they sit, talk about making economies for the national purse at the expense of those people, they are recreating the spirit of Bumbledom, and they are still shocked that Oliver Twist should dare to ask for more.
I am going to support the Second Beading of this Bill. [Interruption.] I hope that hon. and right hon. Gentlemen siting opposite will give me the credit for believing that if they could put forward any alternative proposals that contained one scrap of humanity, any proposals that showed any better hope than are offered in this Bill—and they are very few—of bringing us into a better state of things, I would walk into the Lobby with them in opposition. Because I know that they are completely bankrupt of any constructive alternatives to what is being proposed here, and, in addition, are devoid of any humane instincts towards the poor and more unfortunate citizens, I am left with
what is to me the miserable alternative of voting for a Finance Bill which gives effect to provisions which are merely stop-gap in their nature, do nothing to alleviate the sufferings of the people, and contain nothing that would form a wedge to destroy the capitalist system as it exists, or to lay the foundations of a new social order for the future.

Mr. O'CONNOR: I am not going to follow the hon. Gentleman the Member for Bridgeton (Mr. Maxton) in the somewhat doubtful propriety that led him to associate a spinster with a Baby Austin. But there is one remark worth while taking up. That was when he spoke of budgeting for a surplus. That is exactly one of the things that no democratic State has ever succeeded in doing. When he was speaking about business methods, he was really launching a most convincing argument against the Socialist state and one in favour of the individualistic state. He has been long enough in Parliament to know that if any Chancellor of the Exchequer, no matter from what party he came, was to present Parliament with a surplus, democracy would be at his throat to distribute his surplus. Nor will I follow him when he gave credit to this Government for having made gilt-edged securities the only type of investment that would appeal to anyone who wanted security. The corollary of that is that this Government has made such a shambles of industry that no one will put money into enterprise, and prefer to put it into Government securities.
I want, however, to make a few remarks on somewhat broader lines. We have heard a good deal about the financial crisis through which we have been passing. The hon. Member for Bridge-ton rather pooh-poohed it. None the less, it is an admitted state of affairs, supported by all responsible speakers on the Front Bench. What has the individual citizen, who is the individual taxpayer, been doing in the financial crisis from which every individual citizen is suffering? He has been cutting down. He has been reducing his expenditure. He has been trying to cut his coat according to his cloth, and our main criticism of this Finance Bill is that that is exactly the opposite of what the Government have been doing. The right hon. Gentleman the President of the Board of Trade spoke as though there were only two
alternatives submitted to the House by this party. He said that those two alternatives were Tariff Reform and a tax on sugar. He completely omitted the main and principal alternative that we offer, which is, that in a time of real industrial distress, you should cut down your expenditure in accordance with that distress, as every individual has done. What have the Government done, and what have the Government to present to-night in the Finance Bill, which is to implement the financial situation with which they are faced?
A week ago the Postmaster-General introduced a Bill providing for the expenditure of £32,000,000 in the next three years, and he apologised for it on this footing. He said that it was really very much more than £32,000,000, because owing to the drop in commodity prices it represented a greater burden than that. What is sauce for the goose is sauce for the gander, and exactly the parallel argument applies to the Chancellor of the Exchequer when he comes to the House with a national Budget of about £900,000,000. That represents in real values not only £900,000,000, but an increase on that £900,000,000 amounting to 20 per cent. You do that in this time of national emergency, and the actual Budget figure is £30,000,000 higher than it was last year. It will be seen that, in a time when the back of industry is nearly broken by the economic crisis, we are budgeting in real values for an expenditure of about £200,000,000 more than we did at this time last year. In order to cope with that situation, a situation of the Government's own creation to a very large extent, because it arises from profligate expenditure, they have produced a Budget, and have now introduced a Finance Bill to support it, which completely masks the whole situation. That is the criticism which we level at it. It masks it, first of all, on the expenditure side. It is a flat-catching Budget. It is a Budget which does not really present facts either on the revenue or the expenditure side.
Look, first of all, at the expenditure side. It is said that there is a debt reduction on the last year of £43,500,000. That, as my right hon. Friend the Member for Sevenoaks (Sir H. Young) has already pointed out, is a complete de-
lusion, because out of the other pocket you are taking £35,000,000 which you are borrowing for the Unemployment Insurance Fund. So that, in one stroke, reduces the surplus for debt, redemption to £8,500,000, which, upon a capital debt of £7,500,000,000, means a sinking fund of 16s. 6d. per £1,000, which is grossly inadequate to sustain the financial credit upon which we depend.
Look at the expenditure side. There is at least £100,000,000 of current expenditure for fleeting purposes which does not appear on the expenditure side at all. There is a sum of £50,000,000 for the unemployed which is to be borrowed, and which, by every canon of sound finance, ought to be included as ordinary current expenditure. If the sop to the Liberal party is to be as palatable as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) is entitled to expect, there will be another £50,000,000 to be borrowed on road expenditure, which, again, to a very large extent, is not productive expenditure, because it is not expenditure which is necessitated by the real activity of industry, but only an amenity expenditure. There is a short fall on the expenditure side of something like £100,000,000. On the revenue side there is a short fall of £30,000,000, made up as to £20,000,000 by stealing the dollar reserve, which is a capital reserve and ought to be treated as such, and a short fall of £10,000,000 because one particular type of tax has been imposed which cannot be repeated in any subsequent year, namely, the £10,000,000 tax upon the middle classes.
A lot of very loose talking has been indulged in about this sum of £10,000,000. My hon. Friend said that in 1915 the Income Tax collection was placed in two instalments, whereas formerly it had been in one. The Government might as well have gone back to the Window Tax and have said that because our ancestors paid the Window Tax it might therefore be reimposed and that thereby they would only be depriving the people of to-day of a benefit that they had secured when the Window Tax was abolished. The fact is, that the incidence of a tax is governed by the person who collects the tax. If the Government choose to collect five quarters of a tax in their own financial year, the taxpayer is hit by
the period and method of collection. It is an increase of one-quarter in a tax made upon a selected class of people who happen to be engaged in agriculture, professional enterprises, small shopkeepers and all those people to whom the Socialist party have over and over again appealed in vain and whom, therefore, they are penalising with impunity.
Taking the £100,000,000 of expenditure which does not appear in the expenditure returns in the Budget and the £30,000,000 which is being collected from taxation, it seems perfectly clear that we are overspending at the rate of about £130,000,000 a year. The position is even more serious than that, because we only arrive at that position by committing the State to dissolving its capital reserves at an alarming rate. One has only to take one single figure to show that between 1924 and 1931 no less than £508,230,000 has been collected in the form of Death Duties, and during that period only £321,739,000 have been applied towards the Sinking Fund, which is the appropriate and the only appropriate destination of a tax so inherently capital as the Death Duties. The result is that over those eight years £186,000,000 of taxes; which are purely capital, which are taxes purely upon capital, have been devoted towards the current revenues of the country. That, judged by every canon of sound finance, is unsound. I leave out of that calculation the capital content of the Super-tax and of the higher ranges of Income Tax which undoubtedly ought to be included if we are computing how much of our capital we are devoting to meeting our current expenditure. How can we re-equip ourselves and how can we forge ahead in industrial competition with the rest of the world and how, as the Secretary General of the League of Nations announced at Geneva only a few months ago, can we hope to compete if we so starve ourselves of the very lifeblood of our industry and the resources that are needed to re-equip ourselves, to bring ourselves up to date and to compete effectively in the markets of the world?
I want to turn to another aspect of the Finance Bill, and that is the Land Value Tax. The first observation that ought to be clear to everybody, it is certainly clear to us on this side of the House, is that this is a proposal for new taxation. At a time when we ought to
be considering not how we can inflate the national Budget but how we can diminish it, we are devising and scheming methods for arriving at a very greatly increased taxation. I was particularly interested in the most illuminating and concise remarks of the Solicitor-General. After a long experience he has arrived at the stage when he can state a case precisely and logically, but he has not yet been contaminated by the vice of politics, which requires him to cloak over logic with a degree of falsity which is essential if he is to put a good gloss upon the policy he is called upon to support.
He made one or two statements which I recommend to the close attention of my hon. and right hon. Friends on this side of the House. Having been taxed by the right hon. Member for Edgbaston (Mr. Chamberlain) as to the effect of the incidence of this new tax upon hospitals and colleges, his answer was that they are to be taxed because they have chosen this kind of investment. Because they have chosen to invest their funds in land instead of putting them into some speculative industrial security they are to be taxed and must bear the burden of the policy of the present Government. That is very illuminating, because it shows, what we in fact have always suspected, that this particular kind of tax is directed not so much to securing revenue as to penalising one particular form of capital investment in this country. Upon no other ground did the Solicitor-General attempt to defend the method by which colleges and hospitals are to be penalised, as they will be, by this land tax.
There was another of his answers which I thought did not do justice to my hon. and learned Friend. The right hon. Member for Edgbaston pointed out the undoubted fact that this is a direct tax upon industry, upon the site value of every factory in the country. The answer of the Solicitor-General to that was: Yes, but it simply puts back on their shoulders the enormous and undeserved benefit they got from derating. At any rate, that is frank and honest. That is exactly what it does do, and when any Socialist orator attempts to show that this is not a tax upon industry we shall be able to quote the learned Solicitor-General to prove that it is a tax designed to put back upon
industry the burdens which were removed from it by the Derating Act. The learned Solicitor-General also said, in regard to playing fields, that if you exempt them you encourage the owners of undeveloped land to use them as playing fields. The corollary of that is that it is the policy of the Government to discourage owners of undeveloped land to allow it to be used as playing fields, and I hope that this will also go forth to the various congested urban areas of this country who are only too anxious to seize upon any undeveloped land and use it for these health purposes, which it is the object of the National Playing Fields Association to extend.
In regard to allotments the argument of the hon. and learned Member was even more insidious. He said that we need not bother about allotments in private hands. The owner of land which is convertible into allotments will prefer to turn this land into allotments because it will command a higher agricultural value as allotments and, therefore, will come nearer to the site value basis upon which they will be assessed. Let us examine that argument a little more closely. The agricultural value of allotments will be based upon the rental which is charged to the allotment holders. So my hon. and learned Friend's suggestion amounts to this: "Owners of private land in the neighbourhood of great cities, charge as high a price as you can for the land that you are going to let as allotments, because if you do so you will bring the agricultural value more nearly to the site value, and therefore you will escape a large amount of the tax which otherwise would have to be paid."
Upon the broad grounds the hon. and learned Gentleman completely failed to meet the case which has been made from this side. He confined himself wisely to details, as did the right hon. Gentleman the President of the Board of Trade. He failed to observe that our attack upon this tax—it is a perfectly good humoured attack; we are not obsessed by the venom or bitterness or the shibboleths of 1909–10—is merely an attack, not because in logic in some respects it is not a right tax, but because it has proved to be a tax that cannot be collected equitably, and which, if imposed, can only enforce
hardship on numerous people whom it was never expected to hit. Our attack is because it is an additional burden. It is a dual burden. It is adding a tax to a form of investment which already bears a tax by means of Schedule A and Supertax. It is an attack because it is a heavy tax, because we are not deluded by the penny in the pound with which the Chancellor seeks to ride away. We remember that a penny in the pound represents an additional Income Tax of not less than 8 per cent. if the yield from the land is 5 per cent., which is a very high yield, and that if the yield is a good deal lower, as in most cases it is, it is an additional Income Tax of anything between 14 and 20 per cent. It is an invidious burden, a burden which is selective and which is particularly heavy upon all kinds of productive industry.
Examples are too numerous to mention, as the Solicitor-General will discover when he comes to examine some of the exceptions that logic will compel him to examine during the progress of the Bill. One has only to take, for instance, the case of a factory which settles down in one of the purlieus of London, in the neighbourhood, say, of the Great West Road. The measure of its prosperity and its success is the measure by which its land goes up in value. Its site will be increased in value as it employs more people, and therefore the reason which led the employer to escape from London is to a very large extent neutralised by the very employment which the factory gives and which it ought to be the object of every Government to encourage. Let me quote one or two of the more special cases.
There is the case that has been pointed out in a letter to the "Times" by a colleague in my profession, the case of the Temple. There you have a property the site value of which is probably in the neighbourhood of £10,000,000. That property, which is kept as an open space and carefully preserved by the trustees of the Temple, is to be valued upon the footing that it might house a Grand Babylon Hotel. Could anything be more inequitable or ridiculous? I apprehend that the answer may be, "Oh yes, but you can schedule it as an open space." But the trustees, in many instances, of societies of this kind have no power to do that, apart from the fact that some
necessary buildings may have to be constructed there in course of time. Even if they had the power the answer is not a complete one, because by scheduling it as an open space they increase the value of the buildings which abut upon it, and therefore throw a burden on the occupants of the buildings, and you get the same result in. the long run.
Let me turn again to the question of colleges. I know that my hon. and learned Friend will say, "Yes, but if Oxford colleges invest their money in land they ought to be penalised, and that is what we are doing by this Bill." That is the logic of the case. But let us take a narrower case than that. The big university towns now are also large industrial areas. Oxford is a centre of great industrial activity. It has in the neighbourhood the Morris works and so on, and the colleges have a perfectly enormous site value if we base the value upon the industrial activity of the neighbourhood. Quote apart from their investments, these purely educational establishments are to bear an additional burden on account of the accidental fact that hundreds of years after they were built the towns in which they' were built have become centres of industrial activity. Thus, it may be truly said that this Land Value Tax is going to impose an additional burden upon education in this country.
Finally, let me take what is probably the most glaring anomaly of all, the most inequitable lacuna in the land taxes, namely, the failure to exempt from the scope of the site value improvements made by the private capitalists. That is an elementary measure of justice which was recognised in the land fax proposals of 1909–1910. I have been furnished in this connection—at my own request, I would like to say, for I do not want it to be thought that I am speaking from a brief on behalf of any of the despised dukes—with particulars of an estate with which I have had some professional connection. The Chatsworth Estates are pro-proprietors of a large estate which, in 1858, was composed of about 2,000 acres of very poor agricultural land. Between 1858 and the present time well over £1,000,000 of capital has been sunk in that estate. From 1858 to 1892 no dividend whatever was received upon that capital. I recommend these figures to right hon.
Gentlemen who so often speak about "God giving the land to the people" and the iniquities of dukes. At the present time the gross income from that property is £14,000 a year, and the average gross income is about £8,000, while the costs of management, maintenance and upkeep are approximately £3,500 a year, and about £9,000 is spent upon new works and developments. That is upon an expenditure of well over £1,000,000 added to the original capital value of this agricultural land as it existed in 1858.
There is no single prosperous industrial undertaking in which that money would not yield six or seven times the amount which it is yielding annually at the present time. By a judicious and fructifying application of capital year by year the estate has developed from an agricultural site to a great modern town. There you have practically every amenity and every development—lighting, roads, sewers, water and gas provided by the estate. The net result is that when you come to apply your land tax the whole benefit of that fructifying expenditure is to be denied to the landlord and he is to be put on the same footing as the landlord who has done nothing whatever but milk his estate year by year. Iniquities of that kind will kill these land tax proposals for a certainty. It was upon inequities of that kind that the land taxes of 1909 and 1910 foundered. If you exclude inequities of that kind, there is no shred or rag left of the land taxes. It is because we perceive that this is a tax which, in its incidence, on broad lines, is bound to be inequitable and inoperative and not because of any hereditary predilection such as hon. Gentlemen opposite seem to credit us with, that we oppose the Land Value Tax proposal. We hold that these taxes are futile for the purpose for which they are designed, that they are a snare and a delusion and that, in any case, they impose additional burdens upon a selected class of taxpayers at a time when the task of any Government which is responsible to a democracy should be to see how it can reduce expenditure, instead of imposing fresh taxation.

Mr. LEIF JONES: We are invited in the Amendment that has been moved from the Front Opposition Bench to reject the Budget for three reasons. The
Amendment says, in the first place that the Budget fails to balance; in the second place, that it inflicts hardship and injustice on a selected class of Income Tax payers; and in the third place, that it picks out one particular form of capital for a special tax. That is what the Amendment says, but I doubt if that is all that the Opposition mean. We are accustomed to scrutinise Motions moved from the Front Opposition Bench because they are not unskilled in the art of suppressing their real meaning. In the earlier stages of the Debate, great disappointment was expressed on the benches above the Gangway that there is nothing in the nature of a revenue tariff in the Budget of this year. I suspect that some of the strong opposition from those benches is due to that omission. We remember the Vote of Censure in which the same suppression took place, and at the back of the minds of the Opposition there is always this hope that at last the time is coming when they will make the experiment in Protection for which they are longing.
The Tight hon. Member for Edgbaston (Mr. Chamberlain) and the right hon. Member for Epping (Mr. Churchill) both declared that this was the last Free Trade Budget, and the right hon. Member for Edgbaston expressed on behalf of the Free Traders in the House their relief that this was a Free Trade Budget. Speaking for myself, I had no sense of relief when the Chancellor of the Exchequer unfolded his Budget, because I knew that the Chancellor could introduce no other Budget. I admit that it gives me an extremely restful feeling to know that our finances are managed by a man of such stability of conviction as the present Chancellor of the Exchequer. We are not in perpetual alarm as to what the Chancellor of the Exchequer may next propose. In regard to the Free Trade question, I was perfectly sure in my mind before the Budget that there would be no Protection in it, and the Chancellor has only realised my expectations. The right hon. Gentleman said that it is the last Free Trade Budget. I hope not, and I think not. I hope that it is not the last which the right hon. Gentleman the Chancellor of the Exchequer will introduce into this House. Never again, said the right hon. Gentle-
man the Member for Edgbaston. I remember once hearing Lord Morley say in a speech:
'Never' is a word a politician should never use.
I think that the right hon. Gentleman may very likely live to see the present Chancellor introduce another Free Trade Budget in this House.

Mr. CHAMBERLAIN: The right hon. Gentleman is not quite correctly quoting me. What I said was that he is the last Chancellor of the Exchequer who will introduce a Free Trade Budget.

Mr. LEIF JONES: I admit that there is a distinction. There are more Free Traders in the House and the country than the right hon. Gentleman thinks, and when the present Chancellor of the Exchequer vacates that place, it is extremely probable that another Free Trade Chancellor may fill that office. The Amendment represents the second thoughts of the Opposition. Their first thoughts were expressed by the right hon. Member for Edgbaston as being those of general relief. The first impression of the City was one of relief. Everybody was relieved. The Opposition are really ungrateful. [An HON. MEMBER: "Which Opposition?"] Last year there was an outcry from the Conservative benches because of the taxation which was being imposed. They protested that the country could not stand more taxation, and begged that more taxation might not be imposed. They moved Amendments in Committee to reduce the taxation. This year their criticism is that there is not enough taxation. They say that the £20,000,000 ought not to have been taken from the Dollar Exchange Fund and that taxation ought to have been put on instead that the collection of the Income Tax ought not to have been anticipated and that the Income Tax should have been increased!. They say that the expected surplus is much too small, and, again, that more taxation ought to have been put on. It is an extraordinary change of mind and shows ingratitude on their part.
I agree very largely with the view of the right hon. Member for Epping when, in a memorable speech, he said that the Budget was moderate and sensible. It is true that he chortled at the imitation of his methods in preceding years, and
I think he was entitled to his chortle. It is no doubt very welcome to him to find that what he did when he was Chancellor has been followed in some respects by the present Chancellor of the Exchequer. But what was the position? The Chancellor had to meet a deficit of £37,000,000. He met it by putting 2d. on petrol. That was staggering to the Opposition—and, indeed, to a great many other people. Now it is claimed that the Budget is a miracle, that it is jugglery, that it is a trick, and hence the new Amendment which has been moved. I advise the Opposition to be careful when they denounce the cleverness of the Chancellor in not putting on extra taxation and finding the necessary money without it. Few people are more popular as entertainers than conjurers, and people who can work miracles of this kind are likely to be more popular than otherwise.
Let me examine the criticisms in detail. It is said that the Budget does not balance. The Budget does balance. If we take the expected receipts and the estimated expenditure the Chancellor has quite formally made his Budget balance. I agree with the right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood) that the Budget does not by any means explain the true financial position of the country. It never does. You cannot possibly in a statement covering 12 months show the whole assets and commitments of the country. From the point of view of this 12 months, the Budget balances like every other Budget. That is not a small feat to accomplish in this year. I do not know any other country which can point to the same thing, but I agree that such a statement cannot reveal the true position of the country, and I yield to nobody in my realisation of the gravity of the position of the country at the present time. In formal terms the Budget does balance, and, if the expectations of the Chancellor as to the revenue and the savings to be made are realised, he may hope to get a surplus at the end of the year.
I notice the Amendment says nothing about the £20,000,000 taken from the dollar exchange fund. I am not surprised at that, because I think it is a very successful part of the Budget. What
is the position? When the Opposition have preached that it is impossible to increase taxation without injuring the country and practically all the financiers are agreed that taxation is too high, here is a sum of £20,000,000 available which had been put by in past years to meet a situation which no longer exists. Every body is agreed to-day that it is idle to keep £33,000,000 for the purpose of dealing with the dollar exchange. The only person who made complaint is the hon. Member for Bridgeton (Mr. Maxton) who pleaded for a bigger margin in the Budget to be used for social services. There was this £20,000,000 in America, and the Chancellor is using it for the annual expenditure instead of taxing the public. The hon. Member may very well complain that the Chancellor did not raise another £20,000,000 by taxation in stead of using this money, but I am bound to say that I do not think the Opposition, who have protested so strongly against taxation, are the people who should do it. For my part, I think, having £20,000,000 to find in the Budget and having £20,000,000 free in America, the Chancellor has been very wise in using it instead of putting on extra taxation. I know the right hon. Gentleman the Member for Sevenoaks (Sir H. Young) said the Chancellor was stripped of every vestige of financial orthodoxy because he had used this £20,000,000 as income. After all, this distinction between capital and income is rather artificial. I am sure I should use the money in hand for the needs of the year, and a rigid insistence that this is capital and that is income is really to be governed by rules rather than by common sense. The common sense in the situation was that, having £20,000,000 available, the Chancellor used it to-day instead of putting other taxes on the people. Hon. Members have spoken about the anticipation of Income Tax under Schedules B, D, and E. I do not want to detain the House by going over ground which has already been covered, but I want to point out that payment of part of the instalment in January instead of July is not really the imposition of Is. 1½d. extra tax on the taxpayer for the year. If hon. Members would put down on paper the payment which has to be made by any of those taxpayers in the calendar year—

Sir D. HERBERT: The financial year.

Mr. LEIF JONES: I do not see that that enters into it. Any taxpayer in any calendar year will pay four quarters of Income Tax. Up to now, he has been paying two in January and two in July. In future, if Income Tax goes on at the same rate, he will be paying three in January and one in July. The great confusion which arises in the minds of people is because they lose sight of the fact that once the tax has been levied by the House, taxpayers have to find the money in respect of their income on the year, whether they have to pay in July or at some other time. If they are asked to pay it in January instead of July, the only hardships are that they have to find the money sooner, and that they lose the interest. As far as the rate of tax is concerned, the actual increased rate that the taxpayers will pay is one-third of a penny in the £, and not, as has been suggested by the hon. Member for Watford (Sir D. Herbert), 1s. 1½d. In the calendar year, assuming that the rate of Income Tax remains the same, no Income Tax payer will pay more than he previously paid. The Chancellor of the Exchequer does get his five quarters in this financial year. I cannot make it clearer to the hon. Gentleman the Member for Watford. I am confident that, if he will put the figures down on paper of the payment that has to be made, assuming the tax remains the same over a series of years, he will find that no taxpayer pays more than four quarters of Income Tax in the calendar year.
11.0 p.m.
Therefore, again I say, that that is a preferable arrangement to putting on an increased Income Tax. Possibly a mistake was made in 1915, when a portion of the Income Tax was allowed to be paid in the following financial year. It would be a great deal better if the tax levied for any given year could be collected in that financial year. I have been a payer of Income Tax for a great number of years, and I think I understand it. Taxpayers were allowed to put off till July of next year the payment of tax which was due for this year, and that concession resulted in some disarrangement of our finances. Many estates have got into a similar condition in past years in regard to the payment of rents, sometimes half
a year after they are due, through having what is called a "hanging gale" That is a great inconvenience to the landowner who has to collect his rents, and it is a great inconvenience to the Chancellor of the Exchequer when he has this "hanging gale" for a period of six months in collecting tax from the taxpayer. I would point out that, although the Chancellor of the Exchequer has taken £10,000,000 this year under Schedules B, D and E. there is still another £10,000,000 that he can take next year. I do not know if he is going to do that, but I suggest that, whenever that is done, the finances will be better arranged in respect of our annual statement than they are now, when the payment of this year's taxation is put off till next year.
I wish that the Chancellor of the Exchequer could have included in his Budget some such provision in regard to the reserves of businesses as we pleaded for last year. I think that the Treasury and the Chancellor of the Exchequer are making a mistake in pressing business firms so hardly to declare their full dividends, and in not giving more relief in respect of the reserves of public companies. People are not too apt to be conservative in their finance; there is plenty of inducement for companies to pay as high dividends as possible; and, if a company is careful to put money to reserve for future emergencies, the Government should encourage it to do so. I do not think that enough is done in that respect, and I would urge the Chancellor of the Exchequer and the Financial Secretary to consider whether even now, in this year's Budget, they cannot do something in that direction.
I think that the Chancellor of the Exchequer has done well not to resort to fresh taxation this year, but to give us this modest and moderate Budget in the emergency of our time. I do not propose to speak on the third part of the Finance Bill, which has been fully discussed to-day, except to say that I agree strongly with the plea put forward by the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme for a full valuation of the land of this country. We want that for many purposes. I profoundly regretted it when the old valuation was discarded and the Increment Value Duty was taken off. I occupy a
rather peculiar position in this respect. I once paid over to the Treasury £290 for Increment Value Duty, and I got it back. I was surprised one day to receive through the post £290 which had been paid in Increment Value Duty for a piece of land that I had sold. It was not my own land, but still I was gratified to receive back the £290. That money was surrendered, and the Increment Value Duty was not continued.
The latter part of this Budget would be greatly improved if a complete valuation were provided for. That would be useful for rating purposes, and there would be a public register, which would be very valuable. As to the land tax, I think it is quite right that land should bear a special tax. It has a very special value in many ways. I think that everyone in the House would agree that the community ought to have that part of the value of landed property which is created by the community. The difficulty is to ascertain what has been created by the community and what by the action of individuals. Surely some part of it is always created by the community, and that part, somehow or other, ought to be secured for the public purposes of the community. For that reason I welcome the Land Tax. I hope we shall extend the valuation. I hope we shall amend the Bill in some particulars, because I think it can be greatly improved in Committee. I realise to the full the emergency through which we are passing, and it is for that reason I imagine the Chancellor of the Exchequer has not attempted to do any great things in this Budget other than the Land Tax, which hardly affects this year's finances, but will confine himself to finding the necessary money to balance the year's accounts. I believe in that effort he will have the good will of almost everyone in the House.
I do not agree with the hon. Member for Bridgeton that there is no serious financial crisis. I think there is a very serious financial crisis. Neither do I agree with him that the working classes—which is his phrase and not mine; it is not a phrase that I ever use—are worse off than they have ever been. I have lived a long time and seen many changes, and I say the working classes are better off to-day than they have ever been be-
fore. While there is much more that we have to do, do not let hon. Members under-value what has been done, and do not let them undervalue the suffering that will be inflicted on the working classes if there is a breakdown of the financial system. [Interruption.] I know the conditions outside as well as the hon. Member. I am speaking from the fruits of my experience and intimate knowledge of the conditions under which the working classes live and I say, not without fear of contradiction, because that I shall get, but without fear of being proved wrong, that they are better off to-day than they have ever been. This is a modest, sensible Budget to meet an emergency. It will need help from all quarters in the House not to exceed the estimates which the Chancellor has presented. We shall have to economise. I hope that the House will give the Chancellor support in this Measure, and that his perhaps somewhat sanguine expectations will he realised when we come to consider next year's Budget.

Sir ASSHETON POWNALL: Beyond the signs of confusion that appear to exist in the right hon. Gentleman's mind between capital and income, the main thing that interested us in his speech was the allusion that he four or five times made to my friends on these benches as the Opposition. I have for two years been under the impression that the party sitting there rank as one of the two sections of the Opposition. Judging from the voting last night, when we were in a majority compared with the other side of the House, and only hon. Members there saved the Government, we understand now when he speaks of us as the Opposition that they have given up any idea of opposition. That is a very interesting admission on the part of the right hon. Gentleman, and I am very much obliged to him for having clarified the position of the Liberal party as he has just done. The hon. Member for Bridgeton (Mr. Maxton) chastises in almost equal measure the separate parts of the House, but ended, as I knew he would, by saying that he was going to give the Government the benefit of his vote, but warned them that it might be only transitional benefit.
The President of the Board of Trade was, of course, perfectly accurate in the figures he gave of the increase of the
debt on the Unemployment Fund at the time of the last Conservative administration. I happened to be in a position of greater freedom and less responsibility than my right hon. Friend the Minister of Labour in those days, but I did see a good deal of the Ministry from the inside. The reason the debt increased was not, as he suggested, the maladministration of my right hon. Friend, but because just before the Socialist Government went out in 1924, they increased the benefits and reduced the waiting period from six to three days. The debt started increasing when we came into office, not from our maladministration but from the legislation we had inherited from the right hon. Gentleman and his friends. With regard to the subsequent increase, the right hon. Gentleman must remember that we had in 1926 the most gave industrial troubles for many years past, and there was a very considerable increase of debt for that reason. When the Blanesburgh Committee was set up, it is generally admitted that their figure of 6 or 8 per cent. normal unemployment was unduly optimistic. It is hardly fair to blame the right hon. Gentleman for the appalling state of affairs with regard to the position of the fund when the Government took over. When the Debt only increased at the rate of £6,000,000 a year it was a mere bagatelle compared with the rate at which it is increasing at the moment—£52,000,000 a year. That, surely, is a reason why in previous Budgets it has been permissible not to mention the position of the Debt. In those days there was a reasonable chance of it being repaid, but the whole position is entirely altered now. The only mention I can find in the Budget speech of the unemployment position is the fact that there was a Commission sitting. There was no warning about this £50,000,000 a year which is being piled up, and to that extent it was a dishonest Budget.
When the Budget was opened, I could not help bearing in mind what the present Chancellor would have said of the late Chancellor had he taken £30,000,000 of his £37,000,000 shortage out of the Sinking Fund. I have tried to get some figures which measure the position now and in 1927, and the best I can find are those published by the Board of Trade of the balance of trade, after allowing
for invisible exports, each year. In 1927, alone of the peace years, the balance against this country was in the neighbourhood of £15,000,000. Last year, notwithstanding what hon. Members opposite are pleased to call an economic blizzard, there was a shortage not of £15,000,000 but of actually £45,000,000 or £50,000,000 on this international balance of trade.
Surely the position now is not nearly as serious as it was in 1927 when the then Chancellor of the Exchequer had actually some £70,000,000 or £80,000,000 added to his financial burdens owing to the industrial troubles of the year before. It is most unfair, first of all, to reproach the late Chancellor of the Exchequer for his then action, and then, at a time when the position is not nearly as serious, to proceed to use all our nest eggs in the way the right hon. Gentleman has done. We are told to wait for the report of the Economy Committee. The right hon. Gentleman the President of the Board of Trade was for four years and a-half an admirable Chairman of the Public Accounts Committee I sat under him there. He knows as well as I do the almost impossibility of making savings in our national expenditure. I am pessimistic with regard to the Economy Committee. What use can it be in this year of grace? It is obvious that no report is likely to be presented of a complete nature, and that if either legislative or administrative measures have to be taken, they cannot take effect until probably towards 31st March.
It is estimated that the Land Taxes are likely to cost £1,500,000. I have been at pains to find out what they cost in the year 1909–10. They were then estimated to cost £2,000,000; they actually cost £5,000,000. The sum of £5,000,000 in terms of pre-War currency is roughly equal to £7,500,000 now. It therefore looks as if the £1,500,000 will be very greatly exceeded. With regard to the yield, I ventured in a discussion a fortnight or so ago to give facts and figures that ot most £5,000,000, less Income Tax and Super-tax, might be expected from them. There is a further point which I had not then realised. Any reduction of the value of land in this way is liable to amount to the actual capitalised value of the new tax. In other words, if you are going to get £5,000,000 in this way,
it will probably mean that the value of the land will come down, in round figures, by £100,000. When that money comes into the market, as it does every generation when Death Duties are levied upon it, you will find an appreciable reduction in Death Duties to make up for the reduction in the value of land caused by this tax. Really, if my view with regard to the increased cost over and above the figures which have been given and the decrease of yield is correct, I am not at all sure that the proposal will not prove as big a fiasco from the Government point of view with regard to finance as were the Liberal proposals 20 years ago. I should have thought that it would have been a question of once bit twice shy, and that the Government would have said: "We have had our experience. We want money very badly. We do not want to spend extra money unnecessarily." I should have thought that the Government would have known better than to bring in proposals on these lines. There are a million owners involved. I do not think that the right hon. Gentleman and his friends will find the proposal an electoral asset. I hope that in the near future this proposal may be so whittled away, that it will be of no value whatever.

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): I do not propose to follow the hon. and gallant Member for Lewisham, East (Sir A. Pownall) into the history of the Unemployment Fund during the late Administration, but I would remind him of the fact that the late Government reduced the contributions of the three parties to the fund, and that the great increase in the debt occurred in spite of the fact that during the time they were in office they were not faced with the economic troubles which have overtaken the whole world during the present Administration. With regard to what the hon. Member said about the cost of valuation, either he was not present or he has forgotten the speech made by my hon. and learned Friend the Solicitor-General, the week before last, in which he exploded the idea that it was the valuation alone that cost £5,000,000 last time. He explained that something like £2,000,000 was really the cost of the
valuation and that the other £3,000,000 was due to extraneous circumstances.
The Debate to-day has ranged over a large number of subjects. We have had a considerable amount of desultory criticism from the Opposition above the Gangway. [HON. MEMBERS: "The Opposition!"] I will say from the Opposition above the Gangway and the back benches below the Gangway. There have been a number of criticisms of the Budget as a whole. In particular hon. Members opposite have raised the question of the concession on Income Tax which has been partially withdrawn. The right hon. Member for Camborne (Mr. Leif Jones) dealt very faithfully with that point. In some quarters it has been described as forestalling next year's revenue. That is an entirely inaccurate description of it. For this year's revenue the Chancellor of the Exchequer is only collecting three-fourths of the whole revenue which is properly this year's revenue. All that he has done is to withdraw half the concession which was made in 1015. Hon. Members opposite object to that. What would they put in its place? Would they have liked the Chancellor of the Exchequer to have substituted a 2d. increase in the Income Tax, or would they have wished to go further and have had a 6d. additional Income Tax in order to cover also the money from the American Exchanget? I know perfectly well the answer that they would give if the choice was put to them. They would reject these alternatives, and the Budget as the Chancellor of the Exchequer has introduced it would be the one which they would choose. I have no doubt that in nearly every section of the party they would put forward a different alternative. They would say: "We do not want higher taxation either of 2d. or 6d. on the Income Tax. What we want is a tariff, which you can call a revenue tariff, but which is really intended to be a protective tariff." I shall have something to say later in relation to that panacea and the solicitude which they profess to show for certain persons and institutions under the Land Tax proposals. I would say this to them now; that by nailing the tariff colours to their mast they are abandoning any hope of obtaining the support of the bulk of the Liberal party to vote down the Government.
[HON. MEMBERS: "How do you know that?"] Hon. Members of the Liberal party have said so. They may secure a few Liberal malcontents, but they must realise that they are abandoning entirely any hope of obtaining complete Liberal support. They are, therefore, on the horns of a dilemma. Either they have to angle for Liberal support by abandoning a tariff, in which case they lose the support of the Press Lords, who are now so dear to their hearts, or if they take the Press Lords to their bosom, then they must abandon all hope of turning out the present Government until it completes its term of five years.
When they come to the proposals of the Budget relating to the Land Value Tax they must also make up their minds what line they are going to pursue. I have heard it argued in these Debates that the Land Tax is going to mean that more houses will be built and that it means that fewer houses will be built. Which is the real doctrine of the Opposition? Is it going to raise or lower the price of land? Again, I ask hon. Members opposite to make up their minds as to the view they are going to adopt. Is it going to accelerate the sterilisation of land for the purpose of open spaces, or the reverse? I have heard opposite views from different hon. Members and I have even heard opposite views in the same speech. This attempt to have it both ways may satisfy them but it produces no effect upon us and I do not believe it will have an effect on the vote of this House or upon the country. A great deal of time has been taken up with points of detail. I do not complain of that, but they will be carefully considered in Committee and will be dealt with either by acceptance or rejection as their full import is realised. The hon. Member for Windsor and Eton (Mr. A. Somerville) put certain points to me as to college and university playing fields. It has already been stated that in so far as these college grounds are scheduled as permanent open spaces their site value will be small and the amount of tax they will have to pay will not be very great. The main point of the hon. Member was with regard to college playing fields. As far as I know these are let by land-
lords for the purposes of sport to societies in the universities.
I invite hon. Members to face up to this issue. They seem to imagine that this tax will at once result in all these playing grounds being built over and their use for recreation being abandoned. But with what are they to be built over? At the present time these sports grounds remain open and available for sport until they are demanded by the growth of the town, which, so far as Cambridge is concerned, is largely for dons' houses. Do hon. Members imagine that suddenly, in the passage of this Bill, there are to be two or three times as many dons wanting houses, or that there will be a greatly accelerated marriage rate amongst dons at the universities? If not, where is the sudden increase of houses to come from? I cannot see that happening at all. If at the present time these lands remain open because it suits the landowner to keep them open until he can get building value for them, he will be in precisely the same position after the passage of this Bill. He probably charges all he can get now as rent for the playing fields, and I see no ground for supposing that he will be able to alter the rent when this Bill comes into operation.

Mr. GODFREY WILSON: What about the spread of the university buildings themselves?

Mr. PETHICK-LAWRENCE: I do not think the spread will be enormously increased because of the Bill. Let me now say a few words to my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood). A great part of his life he has given up to promoting proposals for the taxation of land values. I hope that now his project is coming near to realisation he is not going to spend a great part of this Session in wrecking the one practical scheme for carrying his ideas into practice.

Colonel WEDGWOOD: Timeo Danaos.

Mr. PETHICK-LAWRENCE: I fear the Greeks if they are too eager to get exactly what they want. I hope my right hon. Friend will not seek to wreck the scheme by meticulous adherence to theoretical principles. The right hon. Gentleman, in common with the hon. Member
for Montgomeryshire (Mr. C. Davies), expressed a very strong desire that the whole land of this country should be valued and that agricultural land, which bears no taxes under this Bill, should not be excluded from that valuation. Why does he want that? He wants it for certain practical and certain theoretical reasons. The practical reasons are two. In the first place he says that the land may be required subsequently by the local authorities. But does he not realise that the land which the local authorities will want to purchase will be land in the vicinity of the towns, that it will have a value in excess of cultivation value, and that such land will be valued, therefore, under the Bill? Then, he says, it will be wanted for the purpose of rates. But agricultural land at the present time is free from rates. If he wants to make all sorts of changes at the same time that is another matter.

Colonel WEDGWOOD: The whole object of the change of rating is to put rates on agricultural land which has a building value.

Mr. PETHICK-LAWRENCE: The agricultural land which has building value will be valued. It is agricultural land which has nothing but cultivation value which will escape valuation under the Bill. I know the right hon. and gallant Member has still at the back of his mind his theoretical objections, but what we want is an effective system which can be carried out in a reasonable time and with the minimum of cost. The inclusion of all agricultural land in the valuation under the scheme would add enormously to the cost and would add considerably to the amount of time required for carrying out the valuation. It would, in all probability, mean the practical breakdown of the scheme. The right hon. and gallant Gentleman will not forget how the previous scheme failed in 1909–10. A second failure in a case of this kind would do a great deal of damage to the principle which the right hon. and gallant Gentleman has so much at heart. Similar remarks apply to other points raised by the right hon. and gallant Gentleman. As regards sporting rights there is a great deal to be said in principle for his view and I have a great deal of sympathy with his desire to include them, but this is not a question of morality. This is a ques-
tion of getting a practical scheme, and I ask the right hon. and gallant Gentleman to consider the practical difficulties in the way of including sporting rights in individual items of occupation. He will see how fundamentally the inclusion of sporting rights would alter the basis of the scheme. It would make the scheme unworkable in practice. With regard to his third point, which had reference to the First Schedule—dealing with incumbrances from which land is not deemed to be free for purposes of valuation—I think he is wrong in his interpretation. He appears to have forgotten the words "such incumbrances as would be binding on a purchaser." The Bill is intended to apply to covenants which run with the land and the kind of agreement which he has in mind would not be dealt with as he supposes. In reference to the right hon. and gallant Gentleman's remarks about the drafting of the Bill. I should not like to exonerate the Chancellor of the Exchequer and myself and the hon. and right hon. Gentleman associated with us from what the right hon. and gallant Gentleman believes to be defects by attributing them to those concerned in the drafting of the Bill. I entirely repudiate his suggestion in that respect. Every line of this Bill has been carefully considered in regard to its implications by the Members of the Government responsible for it and there is no shred of an excuse for seeking to put responsibility on those who have drafted the Bill for us.
Hon. Gentlemen opposite have shown great solicitude for charitable institutions and have expressed the desire that no additional burdens of any kind should be put upon those institutions. [HON. MEMBERS: "Hear, hear!"] Very good, but what are the proposals which hon. Members opposite themselves favour? They propose a revenue tax, definitely designed to raise the prices of all sorts of articles', including the articles—[lnterrwption.] Do hon. Members really imagine that you are going to pub on a revenue tax of £30,000,000 or £50,000,000 and that it is not going to be, in many cases, passed on to the consumers? Hon. Members have quoted Mr. Keynes, with great delight and approval, but Mr. Keynes, frankly supports that scheme because in his opinion, prices have fallen too low and it is necessary to raise them
by means of a revenue tax. The right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain), speaking at an earlier stage of these Debates, frankly told us that he was in favour of a tax-on sugar. Are hon. Gentlemen really unable to realise that if you put a tax-on sugar, that is going to raise the price of sugar to the consumer? Their revenue tax, if it were imposed, would raise the price of all sorts of articles of necessity and comfort and small luxury to the people. Is not that going to fall upon the hospitals and other institutions? Of course it is. I venture to think that the increased burden that would be caused to institutions which hon. Gentlemen profess to have at heart would be far greater than the burden which may possibly fall on them as the result of some of the Clauses of this Bill. The right hon. Member for Edgbaston was very worried this afternoon about the spinster who had misconstrued the present Bill and imagined that she was going to be taxed under it. The Solicitor-General asked the right hon. Gentleman whether he had written to her explaining that she would not have to pay the tax.

Sir WILLIAM MITCHELL-THOMSON: The Solicitor-General explained that in his speech.

Mr. PETHICK-LAWRENCE: I would ask the right hon. Gentleman if he has also explained to the same spinster that it is the alternative of his party to put on all sorts of revenue taxes that would increase the cost of living to (her far more than any land tax, even if she had to pay it?
I come finally to the question put all through the Debate as to why we have chosen land for this burden, and as to what is the basis of our tax. An answer has already been given to that question, namely, that in our view value is given to land in a special sense by the action of the community. I want to add a supplementary answer to that, and I will first put it in the form of a question. Why do hon. Members opposite suppose that the rating system of this country was invented? Under the rating system all the land and all the buildings are included in the assessable value. Rates are not as low as one shilling and eight-pence in the £ on the annual value; they
are five and six or even ten times as much, and in the rateable value the buildings are included. If there had been no rating system in this country, and we had proposed a rate of 10s. or 15s. instead of one penny on the capital value, we should have had a far greater outcry than we are getting. Why was that rating system invented? It was invented, in my opinion, for two reasons; first, because the expenditure for which the rates are imposed depends on local policy; and, secondly, because the result of that expenditure was thought to inure to the benefit of the property on which the rates are imposed. Time has gone on and it has been recognised that there were many purposes for which rates were imposed which neither depended on purely local policy nor in which the proceeds inured to the benefit of the property holders in the locality. Therefore, there have been a number of adjustments between rates and taxes, but so long as they were adjustments they were not altering the basis of the system. By the De-rating Act something much more fundamental was done. It destroyed part of the source from which the collection of rates was made, without providing any other source to take its place. A new tax to meet this vacancy in part was created by the Petrol Duty, but that does not destroy the fact that a main source of money for the local exchequer was removed. It is commonly said that it amounted to £35,000,000, but what hon. Members fail to realise is that that is not a static sum, but is an increasing sum; that is to say, the amount the authorities lose as against the amount they would get if that had not been taken away will steadily increase from that £35,000,000 so long as productive enterprise grows. This site value which we are now providing creates a new source of revenue to take the place, to some extent, of the source of revenue which has been withdrawn. It is said that pure theory demands the exemption of everything which is not community created. What we have done in this Bill is to go as far in the direction of pure theory as is consistent with practicability, and we have in this site value as defined by the Bill a far fairer basis on which to impose a burden than is provided under the ordinary rating system of the country. Money raised by an impost of this kind, whether in the form of a tax or of a rate, will be
a substitute for burdens which are either already in existence or would be called into existence by the exigencies of the time.
The opposition to this Land Value Tax is based on an entire misconception, because the tax or rate which may hereafter be imposed will be much fairer than when it was imposed on a value in which not merely all improvements but the buildings themselves are included. The party opposite, by their Amendment, would destroy this Finance Bill. If they had their way they would substitute a revenue tariff which would press heavily on all sections of the community and most heavily on those who are least able to bear it. I am quite confident that the House will reject the Amendment and the principle on which it is based.

Sir BASIL PETO: I do not think either the House or the Financial Secretary will expect me to answer the speech which he has made in detail, because my right hon. Friend the Member for Tam-worth (Sir A. Steel-Maitland) will be well able to deal with it; but there are one or two points to which I want to draw attention. Referring to the proposal to raise £10,000,000 out of the £37,000,000 deficit from one particular section of Income Tax payers, the right hon. Gentleman said this was only a partial withdrawal of a concession made in 1915. To whom was that concession made? It was made to a body of taxpayers paying Income Tax not collected at the source in that particular year. Income Tax in the financial year 1915 was raised by 40 per cent., making the tax 3s.6d. in the pound. Many of those taxpayers were members of the Forces fighting abroad at that time. Many of them never came back. A new generation of taxpayers has arisen in the 16 years which have elapsed, and those taxpayers who are now approximately at the age of from 34 to 40, and in the prime of life, and earning considerable incomes in some cases, were not earning any income at all in 1915. Thus the concession was made to one body of taxpayers many of whom have passed away entirely. It is no satisfaction for Mr. Smith, an Income Tax payer to-day, when he is asked to pay 5s. 7½d. instead of 4s. 6d. in a single financial year, to be told that Mr. Brown, another Income Tax payer in a past generation, escaped in one particular year with the payment of
only half-a-year's tax. That entirely demolishes the argument that this is only one-third of a penny and the interest on the amount of the earlier payment, an argument which always presupposes that it is the same man you are dealing with. The particular taxpayer who is to be mulcted this year is not the same man who received the concession in 1915. The fact remains that that particular man who is going to pay his share of the £10,000,000 will recover no part of that sum, and will have to pay a full year's Income Tax at whatever rate may be appropriate to him as long as Income Tax remains in force. The right hon. Gentleman says he would like to know what the Opposition would propose. I will tell him what I would submit. I have in mind that, during the Committee stage of the Finance Bill last year, an Amendment was moved by the hon. Member for Luton (Dr. Burgin) proposing that:
For the purposes of calculating the annual profits or gains arising or accruing from any trade, profession, employment or vocation, there should be deducted in each of the three accounting periods following the sixth day of April, 1930, any sums which, to the satisfaction of the Commissioners by whom the assessment is made, can be proved to have been expended upon the purchase, installation, erection, or improvement or plant or machinery with a view to the reconditioning, equipment, modernisation, or improvement of such plant or machinery."—[OFFICIAL REPORT, 9th July, 1930: col." 477. Vol. 241.]
That Amendment was not only moved by the hon. Member for Luton, but it was ably supported by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), and, on a Division, it only failed to be included in the Finance Act of last year by a majority of two votes or by 277 against it and 275 in its favour. I cannot imagine anything, short of the carrying of an Amendment, which could be a stronger expression of opinion of the House of Commons than the majority of only two votes given against that Amendment last year. It was clearly indicated to the Government that they should see what they could do, before they introduced another Finance Bill, upon this pressing question of the reconditioning of the Industry of the country, as one of the very first steps necessary to deal with the great problem of unemployment. From that point of view was the Government
pressed from the benches below the Gangway, whose Amendment had been very nearly accepted by this House. In his speech this afternoon, the President of the Board of Trade concluded by a reference to this question, when he said that drastic reorganisation of our industry was necessary on a very large scale.
Therefore, I say that the one thing necessary in this Budget is an encouragement to industry to reorganise itself on large lines, by reducing the uniform Income Tax of 4s. 6d. now charged practically universally, not only on the profits of industry distributed to the shareholders, but on everything that is placed to reserve for the reconditioning of industry. That clearly indicates what are the lines that really ought to be pursued, not this special penal tax upon one class of Income Tax payer, but a large exemption of Income Tax upon all moneys placed by companies to reserve for the special purpose of reorganising their industry. That was clearly indicated in the Debates of last year.
12 m.
If the Government needed more funds to meet the large and lavish expenditure which they have been incurring in these depressed times, it would have been far wiser boldly to have raised the rate of Income Tax upon the great body of Income Tax payers, and to have dealt with the question, to which they were pledged last year to go into before another 12 months elapsed, in order to do something. I moved an Amendment in the Committee stage last year, dealing with this very question of obsolescent machinery and wasting assets, assets which are "wasting in the process of seeking profits," which, I think, is the phrase used in the original Income Tax Acts, The President of the Board of Trade said in reply:
What are the steps which have been taken during the past year? I think we can claim to have been carrying out to some extent the promise which was made in 1924. There has been consultation with the Federation of British Industries and the Associated Chambers of Commerce.
And at the end he said:
Therefore, up to this point no agreement has been reached, and the difficulties in the discussion are undeniably considerable."—[OFFICIAL REPORT, 7th July, 1930; col. 101, Vol. 241.]
He went on to indicate that those conversations would continue, and that he hoped to find a solution in the near future. We are entitled to know what has been the result of the Government's consultations with the leaders of industry on this vital and urgent question. It is not a new question; it has been brought before the House for over 20 years past. It is 18 years since the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), when he was Chancellor of the Exchequer, in answer to a speech from the present Master of the Rolls, said that this was a question on which there was undoubtedly a great case to be made, and that it must be dealt with. He said it was an urgent question. That was nearly 20 years ago, but still nothing has been done. On the other hand, undoubtedly we have a great crisis in industry. It is admitted in every quarter of the House, and it has been admitted from the Treasury Bench this afternoon, that what we want is a great policy of reconditioning our industries, but nothing whatever is done to assist it by this Budget and this Finance Bill. This question has been urged upon the Government, they have had long notice of it, and we have not been told that they have done anything, even in the last 12 months, to deal with it. On the contrary, they propose to raise the extra revenue that they want from one section of Income Tax payers only, and they propose to raid a fund which was originally formed in the United States by the purchase of United States securities and the exchange of Government obligations for them—absolutely a capital fund, which they are taking for the purposes of the current expenditure of the country. Beyond the increase of the Petrol Duty, there is no attempt in this Budget honestly to balance the finances of the nation.
I rose for the purpose of asking—and I am sorry I had not the opportunity of doing so at a time when it would have been possible for someone on the Treasury Bench to give me a reply—why nothing has been done about this question of obsolescent. wasting assets and sums placed to reserve, and, incidentally, why nothing has been done to make the conditions a little fairer as between cooperative industry and industry in private hands. Co-operative industry can place
sums to reserve without any deduction of Income Tax from them, for the improvement and reconditioning of that industry, but nothing is done to place people who are carrying on industry and trade in private hands in anything approaching the same position. That is only a small part of this question. The main fact remains that the Government knew of this problem, they knew that it was the one thing that had to be deal with, and they have not made the slightest attempt in this Budget to help industry by dealing with it.

Sir ARTHUR STEEL-MAITLAND: I think the course of the Debate to-day—I have listened to nearly all of it—has justified every word of the criticism uttered by my right hon. Friend in his opening remarks. We have two wholly separate subjects joined together in this Bill, like an ill-assorted pair of Siamese twins, the finance of the year and a valuation scheme, which is not intended to produce any revenue for another two years. The result is that we have had a confusion of issues during the whole afternoon. I can imagine no other reason for having this kind of arrangement of the Debate than that if the attention of the House had been concentrated on any one of the subjects alone, its shortcomings would have been much more clearly indicated than has been the case. One of the most interesting features of the Budget has been the difference in the successive phases of public opinion with regard to it. The first feeling was undoubtedly one of relief. That was succeeded by amusement at the way in which the Chancellor of the Exchequer adopted every one of the expedients of his predecessor which he denounced at the time. The prevailing feeling with regard to the Budget is its complete unreality. The President of the Board of Trade has done nothing to clear up that unreality. It is more patent now that ever it was. It has no connection with the world of facts as we know it. Take it for a moment on its face value. The Chancellor of the Exchequer hopes for better trade some time this year, and the realisation of that hope is the keystone of the whole structure. Not only is the whole Budget founded on it. Most of the chief items of it, both of revenue and expenditure, are founded on it also. If
there is no foundation for that hope of better times this year, there is no foundation for the Budget either. It is not even a gamble. A gamble means that it is a toss up—that you may have success or failure. If trade does not improve to the degree that the Chancellor hopes and anticipates, the Budget is nothing less than a fraud and a sham upon a credulous country.
I ask anyone who quarrels with the words I have used to consider one or two of the main items both of the revenue and of the expenditure. The Chancellor has budgeted for £90,000,000 from Death Duties. That is £3,000,000 more than he anticipated a year ago from the yield of the new duties in a whole year. What has happened in the meantime? He has overlooked, or in his optimism disregarded, one fact, that the yield of the Death Duties in this year depends upon the capital values in this year. After allowing for Government securities having maintained their value, there has been an enormous shrinkage in capital values as a whole. The shrinkage has been huge, and the result is that not only are individual estates lessened in value, but they also sink into a lower class so that a lower percentage is paid upon them. The most reliable estimate I can obtain from those best qualified in the City is that the least loss to be anticipated is something in the order of £7,000,000 if trade does not improve, as against the £3,000,000 extra which the Chancellor expects to get. That in itself, on the basis of trade not improving, would be something like a deficit of £10,000,000. The same situation arises with regard to stamps. I do not propose to go into it in detail; it is a complicated subject. The Chancellor expects another £4,000,000 of revenue from stamps. The most conservative opinion I can obtain from those best qualified to know is that, unless a great improvement in trade occurs, there will be a decrease of from £2,000,000 to £4,000,000. That means another £6,000,000 or £8,000,000 deficit. Lastly, with regard to the Income Tax, the Chancellor of the Exchequer estimated for a decrease of 3 per cent. on last year. It is difficult for anyone except expert authorities at the Inland Revenue to make an exact estimate, but if anyone will consider the year of acute depression on which the Income Tax receipts of this financial
year will be based as compared with the preceding year, half of which, at any rate, was tolerably good, I think that the Chancellor's estimate with regard to the drop in percentage is a very optimistic one.
I mention these items on the revenue side and pass briefly to the expenditure side. The Budget provides £30,000,000 for transitional benefit. The assumption on which that £30,000,000 is based is that the system of transitional benefit as a system is going to be brought to an end in October. After that only individual benefit years will be completed. The stoppage in October is calculated to effect a saving of some £5,000,000 to £7,000,000 to the Exchequer. To the hon. Member for Bridgeton, who put a question to me sometime ago, I would put this question: He says he is going to support the Budget to-night. Part of the Budget provides for the stoppage of transitional benefit in October. When this Debate is over I take the train for Rutherglen. Is that the message I have to take there, that he supports this Budget which will stop transitional benefit? Suppose that this benefit does cease, what is going to happen to the decent people who no longer get transitional benefit? Is any provision at all to be made for them? There is no provision whatever in this Budget. If there is any provision for it, is it going to be charged to the local authority, because that is contrary to the principles of Members opposite? If not, if State money is provided for them, it will mean another deficit of some £5,000,000 which has to be found some-where.
There is only one other item of public expenditure on which I want to touch, and that is the debt on the Unemployment Insurance Fund. The President of the Board of Trade criticised my right hon. Friend, because he said that in dealing with this subject he had either been inaccurate or inadequate in his history with regard to the fund. The President of the Board of Trade, who is not generally inaccurate, gave his history of the fund during the last administration. There was a somewhat strange omission. He omitted all reference to the General Strike and what followed it. The President of the Board of Trade is
usually so accurate that he must have had his memory severely under control when he made that omission from his statement. Does the Chancellor of the Exchequer really omit the increasing debt, estimated this year at something between £45,000,000 to £55,000,000, from his national stocktaking? The Chancellor of the Exchequer, I know, believes that he is going to recover this debt from the contributors to the fund. Does anyone else really believe it? It is all very well when you have a debt that does not amount to a year's income of the fund. It might be possible under those circumstances. But the moment you see it mounting to £100,000,000 or more, as it will this year, and to more than two or three years' income of the fund, does anyone think that you can get it repaid. Are you going to the workmen in these years of acute unemployment and ask them to pay their share of the deficit in addition to the contributions that they will be asked to make in order to keep the fund solvent in the future? Is it expected for a moment that we can go to industry and ask them to make good their contributions to the fund, when everyone knows that the great disadvantage to industry at the moment is that their costs are too high and that this particular impost burdens industry most directly, and thus constitutes the greatest weight upon it? Outside dreamland, there is no one who thinks that you can really look to getting the repayment of the whole of the enormous debt of over £100,000,000 by contribution either from the employers or the men. Therefore, it is quite clear that if we take this into our national stocktaking the increase in the debt of the fund at this moment is going to wipe out the whole of the pretended Sinking Fund which is included as part of the Budget which has been put before us.
Those are the likely prospects if the hopes for the improvement of trade do not materialise. I am sorry that the Financial Secretary to the Treasury spoke first. I wanted to ask him if the Chancellor of the Exchequer has consulted even one of his economic experts of the Economic Council as to whether they really expect the improvement of trade in the current year? Has he con-
sulted one of those authorities in the City or elsewhere whose experience gives them the possibility of forming a fair estimate? Has he gone into any of those series of facts and figures, such as the stocks of raw material, from which possibly some glimpse of what is likely to happen in the future can be gleaned? If he asked any of those people, I do not think that they would tell him that at this moment there is the least sign of any improvement in conditions either in the world or in this country? For the Government to build such a hope in such circumstances is to deceive people who are credulous and willing to be deceived.
The President of the Board of Trade said that if deficits occurred no doubt they would have to see whether they could meet some of them by economies. When we turn to the prospect of economy perhaps the picture looks a little brighter. The Government are pledged to economy up to the hilt. There are Members of their own party who are pledged against economy but they will vote with the Government every time. The Liberals are also pledged to economy. The right hon. Member for Darwen (Sir H. Samuel) makes it his chief reason for accepting and supporting the Budget that he realises that we must balance the national finances not upon further taxation but upon further economies. I think the Government treat their Liberal colleagues rather hardly in this respect. Liberals realise that zeal for economy in the abstract is worthless and that you have to get down to brass tacks before you get any economy of value. They know that time is vital and that, if substantial economies are to be made, every day that is wasted means that thousands of pounds are lost to the Exchequer. They know what happened in regard to the Geddes Committee. What has happened to their own Economy Committee? The days have lengthened into weeks and the weeks into months, and there is no sign of that Committee issuing an interim report. We do not even know whether it has held any sittings. It is all very disheartening to the Liberal party. What wonderful self-restraint it is on their part that they can forbear to press the Government.
Hope deferred maketh the heart sick,
but it never takes their feet into the wrong Lobby. I pin my faith to the right hon. Member for Darwen. When I read again the principles by which he is guided I cannot bring myself to doubt his determination. He says:
I have swerved neither to the right nor to the left, and I shall not swerve now. Pacts, alliances, understandings with other parties make no appeal to me. In my first speech, after my return to British politics I said in a democracy the best tactics are no tactics. Say what you mean, mean what you say, go straight to your object. There is no other sound rule in politics.
At any rate to-day he is taking a firm stand. [An HON. MEMBER: "And yesterday!"] And to-morrow. The acid test is coming when we get the report of the Royal Commission; and then the right hon. Gentleman will not shrink. We were told by him that when that report comes out
if it is fair, impartial and reasonable its recommendations will be received with unanimous acceptance and the Government will not hesitate to rise to the height of their national duty and put into force unpopular as they may be in certain quarters such recommendations as may be made.
The only thing the right hon. Gentleman does not tell us is whether the Liberal party will rise to the height of its national duty. If it does then the victory for economy will be overwhelming.
There is one thing, however, which is even more important than a sound Budget. It is the state of trade and industry which is the foundation of the Budget and of all finance. The Chancellor of the Exchequer has prayed in aid the precedent of Mr. Gladstone; so also have the Liberal party. But they forget the chief feature of Mr. Gladstone's series of great Budget speeches. He was very proud of a recurring surplus year after year, but what he gloried in still more was the increasing prosperity in the country and the abounding growth of trade which made those surpluses possible. The vital thing in any year is not so much the tale of the eggs as the health of the goose which lays them. To use another comparison, if the frost nips the blossom off the tree and the orchard does not bear sufficient fruit in one year it does not matter so much if the trees themselves are sound. Mr. Gladstone kept his finger on the pulse of industry, a thing which the present Government
has never done. In this respect more than in any other their incompetence to deal with the situation has been shown. We are told that our misfortunes are due to the so-called economic blizzard which has come upon the world. They are fine pilots in a storm; and a fine crew they have behind them. After the storm had been blowing for six months we have a speech from the Chancellor of the Exchequer showing his degree of insight into the industrial situation. You might have imagined that, after six months, he would have been able to analyse it somewhat and estimate the factors that made for the future. After six months, in his Budget speech last year, he used these words:
I hope, nay I am confident, that when I stand at this Box next year I shall be able to submit to the House of Commons a much more cheerful and encouraging statement."—[OFFICIAL REPORT, 14th April, 1930; col. 2682, Vol. 237.]
Six months passed and in six months he might have learned some caution. But when it came to November you have him saying, and there are occasions in between, that:
I not only confidently hope, but I believe there are signs of improvement of trade, and when it comes it will come with great rapidity.
That is the understanding shown after a year by the Chancellor of the Exchequer of the conditions, and in this Budget once again he hopes that there

will be a rapid improvement of the trade of the country, and in each case there has been no sign whatsoever to justify his optimism. But he is not alone. The Secretary of State for Dominion Affairs two months after the slump began told us that there were very early signs of improvement. The President of the Board of Trade is a little more cautious, but he did much the same thing in Edinburgh, in January, when be spoke of a more favourable outlook this spring. It is all very well for hon. Members oppo site to talk of optimism. I am optimistic, but I do not call it optimism to misjudge the circumstances. Optimism means facing facts and facing them with a good heart. There is all the difference between keeping your pecker up and hiding your head in the sand. The result has been shown in the finances of this year, and so far they show no understanding of the future. We have had with us and we hope that we shall again after the Recess have the Chancellor of the Exchequer. He is a man of great ability; we know his courage; his industry is beyond question. But what he has given us is a Budget which would be a reproach to the latest joined Treasury clerk.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 270; Noes, 230.

Division No. 250.]
AYES.
[12.34 a.m.


Adamson, Rt. Hon. W. (Fife, West)
Brown, W. J. (Wolverhampton, West)
Edmunds, J. E.


Adamson, W. M. (Staff., Cannock)
Buchanan, G.
Edwards, E. (Morpeth)


Addison, Rt. Hon. Dr. Christopher
Burgess, F. G.
Elmley, Viscount


Aitchison, Rt. Hon. Craigle M.
Burgin, Dr. E. L.
Foot, Isaac


Alexander, Rt. Hon. A. V. (Hillsbro')
Caine, Hall., Dement
Freeman, Peter


Alpass, J. H.
Cameron, A. G.
Gardner, B. W. (West Ham, Upton)


Ammon, Charles George
Cape, Thomas
Gardner, J. P. (Hammersmith, N.)


Angell, Sir Norman
Carter, W. (St. Pancras, S. W.)
George, Rt. Hon. D. Lloyd (Car'vn)


Arnott, John
Charleton, H. C.
George, Megan Lloyd (Anglesea)


Aske, Sir Robert
Church, Major A. G.
Gibbins, Joseph


Attlee, Clement Richard
Clarke, J. S.
Gibson, H. M. (Lanes, Mossley)


Ayles, Walter
Cluse, W. S.
Gill, T. H.


Baker, John (Wolverhampton, Bilston)
Cocks, Frederick Seymour
Glassey, A. E.


Barnes, Alfred John
Compton, Joseph
Gossling, A. G.


Batey, Joseph
Cove, William G.
Gould, F.


Benn, Rt. Hon. Wedgwood
Cripps, Sir Stafford
Graham, Rt. Hon. Wm. (Edin., Cent.)


Bennett, Sir E. N. (Cardiff, Central)
Daggar, George
Granville, E.


Bennett, William (Battersea, South)
Dallas, George
Gray, Milner


Benson, G.
Dalton, Hugh
Greenwood, Rt. Hon. A. (Colne)


Bevan, Aneurin (Ebbw Vale)
Davies, E. C. (Montgomery)
Grenfell, D. R. (Glamorgan)


Bondfield, Rt. Hon. Margaret
Davies, D. L. (Pontypridd)
Griffith, F. Kingsley (Middlesbro' W.)


Bowen, J. W.
Davies, Rhys John (Westhoughton)
Griffiths, T. (Monmouth, Pontypool)


Bowerman, Rt. Hon. Charles W.
Day, Harry
Grundy, Thomas W.


Broad, Francis Alfred
Denman, Hon. R. D.
Hall, G. H. (Merthyr Tydvil)


Brockway, A. Fenner
Dudgeon, Major C. R.
Hall, J. H. (Whitechapel)


Bromfield, William
Dukes, C.
Hall, Capt. W. G. (Portsmouth, C)


Brooke, W.
Duncan, Charles
Hamilton, Mary Agnes (Blackburn)


Brothers, M.
Ede, James Chuter
Hamilton, Sir R. (Orkney & Zetland)


Brown, C. W. E. (Notts Mansfield)
Edge, Sir William
Harbord, A.


Harris, Percy A.
Malone, C. L'Estrange (N'thampton)
Shaw, Rt. Hon. Thomas (Preston)


Hastings, Dr. Somerville
Mander, Geoffrey le M.
Shepherd, Arthur Lewis


Haycock, A. W.
Manning, E. L.
Sherwood, G. H.


Hayday, Arthur
Mansfield. W.
Shiels, Dr. Drummond


Hayes, John Harvey
Marcus, M.
Shillaker, J. F.


Henderson, Arthur, Junr. (Cardiff, S.)
Markham, S. F.
Shinwell, E.


Henderson, W. W. (Middx., Enfield)
Marley, J.
Short, Alfred (Wednesbury)


Herriotts, J.
Marshall, Fred
Simmons, C. J.


Hicks, Ernest George
Mathers, George
Sinclair, Sir A. (Caithness)


Hirst, G. H. (York W. R. Wentworth)
Matters, L. W.
Sinkinson, George


Hirst, W. (Bradford, South)
Maxton, James
Sitch, Charles H.


Hoffman, P. C.
Messer, Fred
Smith, Ben (Bermondsey, Rotherhithe)


Hollins, A.
Middleton, G.
Smith, Frank (Nuneaton)


Hopkin, Daniel
Mills, J. E.
Smith, Rennie (Penistone)


Horrabin, J. F.
Milner, Major J.
Smith, Tom (Pontefract)


Hudson, James H. (Huddersfield)
Montague, Frederick
Smith, W. R. (Norwich)


Hunter, Or, Joseph
Morgan, Dr. H. B.
Snowden, Thomas (Accrington)


Isaacs, George
Morley, Ralph
Sorensen, R.


Jenkins, Sir William
Morrison, Rt. Hon. H. (Hackney, S.)
Stamford, Thomas W.


John, William (Rhondda, West)
Morrison. Robert C. (Tottenham, N.)
Stephen, Campbell


Johnston, Rt. Hon. Thomas
Mort, D. L.
Strachey, E. J. St. Loe


Jones, Llewellyn-, F.
Muff, G
Strauss, G. R.


Jones, J. J. (West Ham, Silvertown)
Muggeridge, H. T.
Sullivan, J.


Jones, Rt. Hon. Leif (Camborne)
Murnin, Hugh
Sutton, J. E.


Jones, Morgan (Caerphilly)
Naylor, T. E.
Taylor, R. A. (Lincoln)


Jowett, Rt. Hon. F. W.
Newman, Sir R. H. S. D. L. (Exeter)
Taylor, W. B. (Norfolk, S. W.)


Jowitt Sir W. A. (Preston)
Oldfield, J. R.
Thorne. W. (West Ham. Plaistow)


Kelly, W. T.
Oliver, George Harold (Ilkeston)
Thurtle, Ernest


Kennedy, Rt. Hon. Thomas
Oliver, P. M. (Man., Blackley)
Tillett, Ben


Kenworthy, Lt.-Com. Hon. Joseph M.
Owen, Major G. (Carnarvon)
Tinker, John Joseph


Kinley, J.
Palin, John Henry
Toole, Joseph


Kirkwood, D.
Palmer, E. T.
Tout, W. J.


Knight, Holford
Parkinson, John Allen (Wigan)
Townend, A. E.


Lang, Gordon
Perry, S. F.
Vaughan, David


Lansbury, Rt. Hon. George
Pethick-Lawrence, F. W.
Viant, S. P.


Law, Albert (Bolton)
Phillips. Dr. Marion
Walkden, A. G.


Law, A. (Rossendale)
Pole, Major D. G.
Walker, J.


Lawrence, Susan
Potts, John S.
Wallace, H. W.


Lawson, John James
Price, M. P.
Watkins, F. C.


Lawther, W. (Barnard Castle)
Pybus, Percy John
Watson, W. M. (Dunfermline)


Leach, W.
Quibell, D. J. K.
Watts-Morgan, Lt.-Col. D. (Rhondda)


Lee, Frank (Derby, N. E.)
Ramsay, T. B. Wilson
Wedgwood, Rt. Hon. Josiah


Lee, Jennie (Lanark, Northern)
Rathbone, Eleanor
Wellock, Wilfred


Lees, J.
Raynes, W. R.
Welsh, James (Paisley)


Leonard, W.
Richards, R.
Welsh, James C. (Coatbridge)


Lewis, T. (Southampton)
Richardson, R. (Houghton-le-Spring)
West. F. R.


Lindley, Fred W.
Riley, Ben (Dewsbury)
Westwood, Joseph


Lloyd, C. Ellis
Ritson, J.
White, H. G.


Logan, David Gilbert
Romerll, H. G.
Whiteley, Wilfrid (Birm., Ladywood)


Longbottom, A. W.
Rosbotham, D. S. T.
Whiteley, William (Blaydon)


Longden, F.
Rowson, Guy
Wilkinson, Ellen C.


Lovat-Fraser, J. A.
Russell, Richard John (Eddisbury)
Williams, David (Swansea, East)


Lunn, William
Salter, Dr. Alfred
Williams Dr. J. H. (Llanelly)


Macdonald, Gordon (Ince)
Samuel, Rt. Hon. Sir H. (Darwen)
Wilson, c H. (Sheffield, Attercliffe)


MacDonald, Malcolm (Bassetlaw)
Samuel, H. Walter (Swansea, West)
Wilson, R. J. (Jarrow)


McElwee, A.
Sanders, W. S.
Winterton, G. E. (Leicester, Longhb'gh)


McEntee, V. L.
Sandham, E.
Wise, E. F.


McKinlay, A.
Sawyer, G. F.
Wood, Major McKenzie (Banff)


MacLaren, Andrew
Scott, James
Young, R. S. (Islington, North)


Maclean, Sir Donald (Cornwall, N.)
Scrymgeour, E.



Macpherson, Rt. Hon. James I.
Scurr, John
TELLERS FOR THE AYES.—


McShane, John James
Sexton, Sir James
Mr. Charles Edwards and Mr. Wilfrid Paling.


NOES.


Acland-Troyte, Lieut.-Colonel
Bevan, S. J. (Holborn)
Butler, R. A.


Ainsworth, Lieut.-Col. Charles
Birchall, Major Sir John Dearman
Butt, Sir Alfred


Albery, Irving James
Bird, Ernest Roy
Cadogan, Major Hon. Edward


Alexander, Sir Wm. (Glasgow, Cent'l)
Boothby, R. J. G.
Campbell, E. T.


Allen, Sir J. Sandeman (Liverp'l., W.)
Bourne, Captain Robert Croft
Carver, Major W. H.


Allen, Lt.-Col. Sir William (Armagh)
Bcwater, Col. Sir T. Vansittart
Castle Stewart, Earl of


Amery, Rt. Hon. Leopold C. M. S.
Bowyer, Captain Sir George E. W.
Cautley, Sir Henry S.


Ashley. Lt.-Col. Rt. Hon. Wilfrid W.
Bracken, B.
Cayzer, Sir C. (Chester, City)


Atholl, Duchess of
Braithwaite, Major A. N.
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)


Atkinson, C.
Brass, Captain Sir William
Cazalet, Captain Victor A.


Baillie-Hamilton, Hon. Charles W.
Priscoe, Richard George
Cecil, Rt. Hon. Lord H. (Ox. Univ.)


Baldwin. Rt. Hon. Stanley (Bewdley)
Broadbent, Colonel J.
Chadwick, Capt. Sir Robert Burton


Balfour, George (Hampstead)
Brown, Col. D. C. (N'th'l'd., Hexham)
Chamberlain, Rt. Hn. Sir J. A. (Birm. W.)


Balfour, Captain H. H. (I. of Thanet)
Brown, Brig. -Gen. H. C. (Berks, Newb'y)
Chamberlain, Rt. Hon. N. (Edgbaston)


Balniel, Lord
Ruchan, John
Christie, J. A.


Beamish, Rear-Admiral T. P. H.
Buchan-Hepburn, P. G. T.
Cobb, Sir Cyril


Beaumont M. W.
Buckingham, Sir H.
Cockerill, Brig.-General Sir George


Bellairs, Commander Carlyon
Bullock, Captain Malcolm
Cohen, Major J. Brunei


Betterton, Sir Henry B.
Burton, Colonel H. W.
Colfox, Major William Philip




Colman, N. C. D.
Hope, Sir Harry (Forfar)
Roberts, Sir Samuel (Ecclesall)


Colville, Major D. J.
Howard-Bury, Colonel C. K.
Rodd, Rt. Hon. Sir James Rennell


Conway, Sir W. Martin
Hudson, Capt. A. U. M. (Hackney, N.)
Ross, Ronald D.


Courtauld, Major J. S.
Hurd, Percy A.
Ruggles-Brise, Colonel E.


Courthope, Colonel Sir G. L.
Hurst, Sir Gerald B.
Russell, Alexander West (Tynemouth)


Cranborne, Viscount
Hutchison, Maj.-Gen. Sir R.
Salmon, Major I.


Crichton-Stuart, Lord C.
Inskip, Sir Thomas
Samuel, A. M. (Surrey, Farnham)


Croft, Brigadier-General Sir H,
Iveagh, Countess of
Sandeman, Sir N. Stewart


Crookshank, Capt. H. C.
Jones, Sir G. W. H. (Stoke New'gton)
Sassoon, Rt. Hon. Sir Philip A. G. D.


Croom-Johnson, R. P.
Kindersley, Major G. M.
Savery, S. S.


Calverwell, C. T. (Bristol, West)
Knox, Sir Alfred
Shepperson, Sir Ernest Whittome


Cunliffe-Lister, Rt. Hon. Sir Philip
Lamb, Sir J. Q.
Simon, Rt. Hon. Sir John


Oalkeith, Earl of
Lambert, Rt. Hon. George (S. Molton)
Sinclair, Col. T. (Queen's U., Bellst)


Dairymple-White, Lt.-Col. Sir Godfrey
Lane Fox, Col. Rt. Hon. George R.
Skelton, A. N.


Davidson, Rt. Hon. J. (Hertford)
Latham, H. P. (Scarboro' & Whitby)
Smith, Louis W. (Sheffield, Hallam)


Davies, Dr. Vernon
Leighton, Major B. E. P.
Smith, R. W. (Aberd'n & Kincdine, C.)


Davies, Maj. Geo. F. (Somerset, Yeovil)
Lewis, Oswald (Colchester)
Smith-Carington, Neville W.


Davison, Sir w. H. (Kensington, S.)
Llewellin, Major J. J.
Smithers, Waldron


Dawson, Sir Philip
Locker-Lampson, Rt. Hon. Godfrey
Somerset, Thomas


Despencer-Robertson, Major J. A. F.
Locker-Lampson, Com. O. (Handswth)
Somerville, A. A. (Windsor)


Dixey, A. C.
Long, Major Hon. Eric
Somerville, D. G. (Willesden, East)


Duckworth, G. A. V.
Lymington, Viscount
Southby, Commander A. R. J.


Dugdale, Capt. T. L.
Macdonald, Capt. p. D. (I. of W.)
Spender-Clay, Colonel H.


Eden, Captain Anthony
Macquisten, F. A.
Stanley, Lord (Fylde)


Edmondson, Major A. J.
Maitland, A. (Kent, Faversham)
Stanley, Hon. O. (Westmorland)


Elliot, Major Walter E.
Makins, Brigadier-General E.
Steel-Maitland, Rt. Hon. Sir Arthur


Erskine, Lord (Somerset, Weston-s.-M.)
Margesson, Captain H. D.
Stuart, Hon. J. (Moray and Nairn)


Everard, W. Lindsay
Marjoribanks, Edward
Sueter, Rear-Admiral M. F.


Falle, Sir Bertram G.
Mason, Colonel Glyn K.
Taylor, Vice-Admiral E. A.


Ferguson. Sir John
Meller, R. J.
Thomas, Major L. B. (King's Norton)


Fielden, E. B.
Merriman, Sir F. Boyd
Thompson, Luke


Fison, F. G. Clavering
Milne, Wardlaw., J. S.
Thomson. Sir F.


Forestler-Walker, Sir L.
Mitchell, Sir W. Lane (Streatham)
Thomson, Mitchell-, Rt. Hon. Sir W.


Fremantle, Lieut.-Colonel Francis E.
Moore, Sir Newton J. (Richmond)
Tinne, J. A.


Galbraith, J. F. W.
Moore. Lieut.-Colonel T. C. R. (Ayr)
Titchfield, Major the Marquess of


Ganzoni, Sir John
Morrison, W. S. (Glos., Cirencester)
Todd, Capt. A. J.


Gault, Lieut.-Col. A. Hamilton
Muirhead, A. J.
Train, J.


Gibson. C. G. (Pudsey & Otley)
Newton, Sir D. G. C. (Cambridge)
Tryon, Rt. Hon. George Clement


Gilmour, Lt.-Col. Rt. Hon. Sir John
Nicholson, O. (Westminster)
Turton, Robert Hugh


Glyn, Major R. G. C.
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Vaughan-Morgan, Sir Kenyon


Gower, Sir Robert
O'Connor, T. J.
Wallace, Capt. D. E. (Hornsey)


Graham, Fergus (Cumberland, N.)
O'Neill, Sir H.
Ward. Lieut.-Col. Sir A. Lambert


Greene, W. P. Crawford
Oman, Sir Charles William C.
Warrender, Sir Victor


Grenfell, Edward C. (City of London)
Ormsby-Gore, Rt. Hon. William
Waterhouse, Captain Charles


Gretton, Colonel Rt. Hon. John
Peake, Capt. Osbert
Wayland, Sir William A.


Gritten, W. G. Howard
Penny, Sir George
Wells, Sydney R.


Gunsten, Captain D. W.
Percy, Lord Eustace (Hastings)
Williams, Charles (Devon, Torquay)


Hacking, Rt. Hon. Douglas H.
Peto. Sir Basil E. (Devon. Barnstaple)
Wilson, G. H. A. (Cambridge U.)


Hamilton, Sir George (Ilford)
Pilditch. Sir Philip
Winterton, Rt. Hon. Earl


Hammersley, S. S.
Power, Sir John Cecil
Withers, Sir John James


Hannon, Patrick Joseph Henry
Pownall, Sir Assheton
Wolmer, Rt. Hon. Viscount


Hartington, Marquess of
Purbrick, R.
Womersley, W. J.


Harvey, Major S. E. (Devon, Totnes)
Ramsbotham, H.
Wood, Rt. Hon. Sir Kingsley


Haslam, Henry C.
Rawson, Sir Cooper
Wright, Brig.-Gen. W. D. (Tavist'k)


Henderson, Capt. R. R. (Oxf'd, Henley)
Reid, David D. (County Down)
Young, Rt. Hon. Sir Hilton


Heneage, Lieut.-Colonel Arthur P.
Remer, John R.



Herbert, Sir Dennis (Hertford)
Rentoul, Sir Gervais S.
TELLERS FOR THE NOES—


Hills, Major Rt. Hon. John Waller
Reynolds, Col. Sir James
Commander Rt. Hon. Sir Bolton


Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Eyres Monsell and Sir George Hennessy.


Bill read a Second time, and committed to a Committee of the Whole House for To-morrow.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Tuesday evening, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Thirteen Minutes before One o'clock.